Deduction under section 23 of income tax act,1961

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Rohit Gupta (Querist)
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27 December 2011 Dear Sir,

Whether following charges paid to MCD allowable under Section 23 from rental Income:-

1. Change of Land use charges paid one time.

2. COnversion charges/misuse charges paid every year.

3. Parking charges paid one time...

Thanks
Regards
Rohit

Anand Eriwal

Anand Eriwal (Expert)
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28 December 2011 All the 3 categories of expenses would not be allowable from rental income.

Only municpal taxes actually paid would be allowed as a deduction from the gross annual value of property calculated as per section 23 of the IT Act.

After deducting the muncipal taxes paid the resultant figure is Net annual value.

Only following two deductions are allowed from Net annual value -

1. Standard deduction = 30% of NAV
2. Interest on borrowed capital subject to conditions, limits and restrictions given in the section.

Hope the above response would resolve your query. Do let me know if you have any further questions with respect to the same.

Regards
Anand Eriwal