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.

[Guest]

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

Can Conversion Charges and House Tax Be Claimed as Expenses? Chartered Accountant Clarifies Tax Implications. A query was raised about whether conversion charges and house tax paid to the Municipal Corporation can be claimed as expenses by an assessee. A chartered accountant responded that conversion charges are capital expenditures added to the property's cost, while house tax is allowed as an expense. If a tenant pays these charges, they are considered rental costs, as they fulfill the landlord's obligation. Another participant inquired if there would be any issues if the tenant pays conversion charges and the receipt is in the tenant's name, as per their agreement.