Coversion Charges Paid to Municipal Corporation

[Ashish Gupta]

please help me on following issues

Whether an assessee can claim following exp.

1. Conversion charges paid to MCD.

2. House Tax paid to MCD.

3. If above exp incurred by tenant  whether he is eligible for claiming such expenditure

4. Treatment of above exp in the hands of landlord when such exp paid by tenant

Regards

Advocate Ashish Gupta

[CAGOPALJI AGRAWAL]

Conversion charges paid to MCD would be capital expenditure and added in the cost of property.

MCD tax paid is allowed as expenses.

If MCD tax paid by tenant, it would be in the nature of rent because it is the obligation of the landlord discharged by tenant.

 

Similarly conversion changes paid by tenant would be in the nature of rental costs in the hands of tenant.

Hi 

I would like to know if the tenant is paying the Conversion charges for the property & the receipt that states the payment made is also in his name only. will that make any problem for me.?

i myself pay the property tax. but conversion charges are paid by the tenant & on his name only & the Agreement we made states that the tenant would pay such charges. 

Regards

Ajay

AI Summary

Conversion charges treated as capital expenditure; municipal tax allowed as expense; tenant payments treated as rent.
Conversion charges paid to the municipal corporation are capital expenditure to be added to the cost of the property; municipal/house tax is allowable as an expense. Payments made by a tenant for these obligations (including when receipts are in the tenant's name pursuant to an agreement) are treated as discharging the landlord's obligation and are characterized as rent-like receipts for the landlord and as rental expenses for the tenant.