Owning a real estate property comes with several legal and financial obligations. For example, one needs to pay multiple taxes and charges to the Government, including property registration charges, stamp duty, property tax, etc. If one fails to pay these charges within the due dates, they may lose the ownership of their property or face hefty penalties from the Government.
This article will help homebuyers know what property tax is, how to calculate property tax in India, and what are the different ways to pay property tax online.
What is Property Tax in India?
The State Government or Local Municipal Authorities levy property tax in India. It is also known as “house tax” and is imposed on residential and commercial property owners. This tax is used by municipal bodies to ensure and maintain basic civic facilities for citizens, such as roads, sewage systems, public parks, lighting, etc.
Property tax is calculated as a percentage of the market value of a property. However, the rate and calculation of property tax may differ from one municipal authority to another.
How to Calculate Property Tax?
As mentioned, the rate and method used for the calculation of property tax may vary from one municipal body to another. Hence, there cannot be a single fixed method for the evaluation of property tax. It depends on several factors, including the location of the property, size of the property, age of the property, gender of the property owner, etc.
Generally, three different techniques are used for the calculation of property tax in India:
1. Capital Value System
This system is used for calculating property tax in Mumbai. In the capital value system, the tax is calculated as a percentage of the market value of the property. Based on the location and age of the property, the state Government determines its market value and calculated the applicable property tax on it. These figures are revised on an annual basis.
2. Unit Area Value System
This system is used for calculating property tax by municipal bodies in Kolkata, Delhi, Bengaluru, and Patna, among several other cities. In this system, the tax is calculated on the per unit price of a property’s super built-up area.
3. Annual Rental Value System
This method is used for calculating property tax in Chennai, Hyderabad, and many other cities. This system calculates the tax on a property’s annual rental value. The rental value of a property is decided by local municipal authorities based on the carpet area, locality, amenities, etc., and is made available on various public platforms and Government websites.
How to pay property tax online?
Property owners in India have the flexibility to pay property tax online or offline. However, property tax online payment is an easier and more convenient option. One can simply visit the official website of the local municipal body and view property tax bills online. Here are the steps one can follow to check and pay property tax bills online:
- Step 1 – Visit the official website of the Municipal Body and log in using a unique ID and Password. First-time users may need to register themselves to create their login ID and Password
- Step 2 – Go to the “Property Tax” tab, and select the appropriate option
- Step 3 – One can click on “View Property Tax Bill” to view pending property tax bills or “Pay Property Tax” to pay property tax online. One can also enter the details of their property to view property tax bills online
- Step 4 – Upload the required documents to validate property ownership
- Step 5 – Make property tax online payment using any of the available methods, including debit card, credit card, net banking, e-wallets, and others
- Step 6 – Upon successful payment of the property tax, an e-challan with an acknowledgment number will be generated. One can download this challan to keep a record of their property tax payment
Alternatively, homebuyers can visit the local municipal body office to pay their house tax offline. However, it can involve a lengthy and cumbersome process.
The bottom line
Property tax is levied by the State Government and local municipal bodies on residential and commercial property owners in India. However, this tax is not levied on land owners or plot owners. Paying property tax helps the Governments collect revenue for the maintenance and uplifting of basic civic amenities for their citizens.
That is why one must pay his or her property tax within the due dates. In case a property owner fails to pay his or her property tax in time, he or she may have to face a penalty from the applicable municipal body.
Disclaimer- This article is based on the information publicly available for general use as well as reference links mentioned herein. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.
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