Municipal Tax

1. Municipal Tax includes services tax like Water Tax and Sewerage Tax levied by any local authority. It can
be claimed as a deduction from the Gross Annual Value of the Property.
2. Conditions:
(a) Paid by Owner. The tax shall be borne by the owner and tie same was paid by him during the previous
(b) Property let out: Municipal Tax can be claimed as a deduction only in respect of let out or deemed to
be let out properties (i.e. more than one property self occupied).
(c) Year of payment: Municipal Tax relating to earlier previous years, but paid during the current previous
year can be claimed as deduction only in the year of payment.
(d) Advance Taxes: Advance Municipal Tax paid shall not be allowed as deduction in the year of payment,
but can be claimed in the year in which it falls due.
(e) Borne by Tenant: Municipal taxes met by tenant are not allowed as deduction.
3. Foreign Property: For a property situated outside India, Municipal Tax levied by foreign Local Authority
can be claimed as a deduction

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