Outlook Money
Apart from the equated monthly installments (EMIs), one also has to pay other taxes like a maintenance fee or garbage tax. These fall in the hidden costs.
Municipal taxes are those taxes that are levied by local authorities. In this taxes like that of garbage can only be claimed as deductions for calculating the gross annual value of a house property if paid by the property owner.
In case the municipal taxes are paid by the tenants, the owners can not claim for the deductions.
One can claim deduction only if one is residing in their own property.
The maintenance charges payable to the resident welfare associations (RWA) are not under the classification of municipal taxes and, therefore, are not eligible for deduction while calculating the taxable value of the rent.
As per the GST laws, RWAs need to take a GST registration and collect the GST if the monthly subscription/contribution from their members is more than Rs 7,500 per member.
The collection and maintenance of any security deposit for maintenance does not attract GST.
Residents who live in GST-registered RWAs are required to make a higher payout on account of GST if it is payable.
It should be noted that GST may cancel out savings of ITC since it would be payable on the entire monthly maintenance contribution from members.