IFHP

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silvi ubal gomes

silvi ubal gomes (Querist)
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10 June 2009 Why deductions of municipal tax in IFHP are given on payment basis

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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10 June 2009 see section 23

23. Annual value how determined.—(1) 1[For the purposes of section 22, the annual value of any property shall be deemed to be—
(a) the sum for which the property might reasonably be expected to let from year to year; or
(b) where the property is let and the annual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable:]
2[Provided that where the property is in the occupation of a tenant, the taxes levied by any local authority in respect of the property shall, to the extent such taxes are borne by the owner, be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner according to the method of accounting regularly employed by him) in determining the annual value of the property of that previous year in which such taxes are actually paid by him:]

so it is allowed on payment basis only