While computing income chargeable to tax under the head "Income from house property" in the case of a let-out property, only following items can be claimed as deductions from gross annual value. It other words, deduction cannot be claimed for any expenditure incurred by the taxpayer other than following:
Deduction on account of municipal taxes paid by the taxpayer during the year (*).
Deduction under section 24(a) @ 30% of Net Annual Value.
Deduction under section 24(b) on account of interest on capital borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of the property.
Only municipal taxes paid by the owner during the year can be deduced, hence, municipal taxes due but not paid during the year cannot be deducted or taxes borne by the tenant cannot be deducted.