you will be voted according to your given Answer,

Tax levied by the municipality or local authority is deductible from Gross Annual Value (GAV) As per sec. 27(vi). taxes levied by a local authority in respect of any property shall include service taxes levied by such local authority in respect of such property, Municipal tax includes Service taxes like fire tax, water tax, etc. levied by a local authority Such taxes shall be computed as a % of Net Municipal Value and allowed as deduction subject to the following conditions: 1. It should be actually paid during the previous year 2. It must be paid by the assessee. Taxpoint: Unpaid municipal tax or municipal tax paid by tenant shall not be allowed as deduction 3. It must be related to the previous year or any year preceding the previous year, Taxpoint: Tax paid to foreign local if property is situated in a foreign country, tax paid to foreign local authority shall be authority allowed as deduction Tax exceeds GAV In case municipal tax paid includes tax paid for several past years and the total amount of (Negative NAV) tax so paid by the owner exceeds GAV, then Net Annual Value (NAV) can be negative Refund of tax Refund of Municipal tax paid for a property is not taxable u/s 22 Advance Municipal Tax Municipal tax paid in advance is not allowed, as the Act provides that the taxes levied by paid by the assessee any local authority in respect of property shall be deducted, irrespective of the previous year in which the lability to pay such taxes was incurred by the owner [Proviso to sec. 23 of Income tax Act, 1961] As per the above language it is construed that for claiming deduction in respect of municipal tax, such tax must have already been levied by the local authority. Hence payment of municipal tax in advance (liability in respect of which has not yet incurred) shall not be allowed as deduction in the year of payment f37 ILLUSTRATION 9 H4 H5 Compute net annual value with the following details for the A.Y. 2019-20 Particulars H1 H2 H3 Situated at Patna Anand Hyderabad Municipal Value