Know when to pay property tax in India, how to check property tax details online, how much is the property tax in India, how is property taxed in India & more.

What is Property Tax?

Property tax is the amount the landowners must pay the government-mandated local jurisdiction. The owners of all tangible assets, say residential, commercial or plots like buildings, houses, offices, etc., must pay the tax annually. 

The taxation is usually paid based on the size, type, age, area and construction status of the property. It is also based on the manner of valuation. The percentage paid varies from locality, and district to state. 

Key points covered here are:

On What Type of Property, the Tax is Deducted?

How Property Tax is Calculated in India?

What’s the Due Date of Property Tax Payment in India?

What is the Purpose of Property Tax in India?

What is the Interest Rate on Property Tax?

How to avail of Property Tax Rebates?

Documents Required for Property Tax Payment

How to Deal with Property Tax Disputes and Notices?

Where to Pay Property Tax?

On What Type of Property, the Tax is Deducted?

The Government of India (GoI) has divided properties into 4 categories:

1. Land: Land in its rawest form without any construction or any improvisation on it
2. Structure made on the Land: Immovable man-made construction like buildings or godowns 
3. Personal Property: Movable properties like cars, buses, cranes, etc.
4. Intangible Property: Possession of untouchable royalties and patents

How Property Tax is Calculated in India?

As mentioned earlier, property tax calculation differs from state to state and even differs in localities. There is no particular rule for property tax calculation in India. Tax calculation is determined based on several components like 

• Plots, residentials, industrials or commercials
• Urban or rural, zonal classification
• Self-occupied, vacant or rented 
• Floor area, carpet area, car parking
• Low, mid or high-rise construction
• Year of construction completion
• Calculation System

However, the primary methods to calculate property tax are as follows:

1. Capital Value System

CVS imposes taxes on the percentage of real estate market value. Mumbai municipal authorities use this method of property tax calculation.

2. Unit Area Value System

UAVS imposes taxes on the per-unit prices of the real estate build-up area. The per-unit prices are calculated on usage, location, and land value of the property. It is then multiplied by the total build-up area of the real estate to determine the actual tax amount. 

Kolkata, Delhi, Patna, Bengaluru, etc., municipal authorities use this method of property tax calculation.

3. Annual Rental Value System

ARVS, also known as Rateable Value System, imposes taxes on the annual rental value of the property. The rental value is not equivalent to the rental amount collected on the property.

It is determined by the municipal authorities taking into account the real estate size, location, amenities, etc. Chennai and Hyderabad municipal authorities use this method of property tax calculation.

What’s the Due Date of Property Tax Payment in India? 

The property tax is calculated from April to March annually. The calculation system varies depending on localities. You are eligible to pay by April 30th of the following fiscal year. Some states allow installment.

What is the Purpose of Property Tax in India?

The tax collected by the government is used to build, improve and maintain the basic infrastructure of that particular area such as roads, parks, sewage systems, schools, hospitals, etc., for our safety, security and convenience. 

What is the Interest Rate on Property Tax?

In India, the interest rate on property tax is levied on late tax payments. The percentage may range from 5-20% per month on the amount due.

Moreover, if the taxes remain due for two years, the penalty to be paid equals the unpaid tax plus the unpaid tax with interest at 9% per annum or up to 2% per month.

How to avail of Property Tax Rebates?

It again depends on the local authoritative bodies and varies state-wise. A few are mentioned here:

• Rebate on payment before the due date
• Pocket up to 5% discount on clearing due within the first month or quarter of the financial year
• The tax rate is lower for residential compared to commercial, less for plots 
• Senior citizens, differently-abled people, former defence service personnel, families of martyrs, agricultural properties and educational institutions get a percentage exemption in property tax bills.

Keep your real estate details updated on the municipal corporation website and watch for deadlines. When you act fast, you make smart savings on property taxes. What’s more, regular on-schedule payment boosts your credit score and greases your application for home loans or property on sale. 

Documents Required for Property Tax Payment

Keeping your documents at hand makes the process smoother. The following documents are what you’ll need to avoid unnecessary delays:

• Previous year tax paid receipt
• Assigned Khata number or PID (Property Identification Number)
• Sale deed or proof of real estate ownership
• Details of any modification or construction post-assessment, if any
• Filled application form from the municipality’s website

How to Deal with Property Tax Disputes and Notices?

The above-mentioned documents could come in handy when you get a property tax notice. First, check the details in the notice thoroughly i.e., real estate size, classification, tax amount, etc. Mistakes do happen. 

When you spot the error, reach out to municipal authorities via the web or offline. File an objection and keep watch on the deadline. While the objection is under process, you might have to pay late payment interest on the due amount later. So, discuss this clearly with the authorities as well.

Arm with evidence for your objection and required corrections. This is where the documents play their part.

Where to Pay Property Tax?

Here are the links to respective municipal corporation property tax payment portals.

• BBMP (Bangalore): BBMP Property Tax
• GHMC (Hyderabad): GHMC Property Tax
• KMC (Kolkata): KMC Property Tax
• MCD (Delhi): MCD Property Tax
• PMC (Pune): PMC Property Tax
• CDMA (Andhra Pradesh): CDMA Property Tax
• GVMC (Visakhapatnam): GVMC Property Tax
• AMC (Ahmedabad): AMC Property Tax
• MCG (Gurgaon): MCG Property Tax
• NMMC (Navi Mumbai): NMMC Property Tax
• GMC (Guwahati): GMC Property Tax
• MCGM (Mumbai): MCGM Property Tax
• BDA (Bhubaneswar): BDA Property Tax
• NMC (Nagpur): NMC Property Tax
• SDMC (South Delhi): SDMC Property Tax
• VMC (Vijayawada): VMC Property Tax
• TMC (Thane): TMC Property Tax

While you pay one time to buy real estate and become a landowner, you have to pay a small amount annually in the form of property tax to retain the ownership. There are percentage exemptions for income taxpayers on certain terms and conditions. Now that you know what factors determine the property tax valuation, check the sales deed thoroughly while buying an apartment in Anekal, a villa in Sarjapur or a plot in Chandrapura to ensure proper measurements, amenities and taxation to be charged. Speaking of properties in Bangalore, reach out to www.theceyone.com to browse through the hottest properties in Bangalore, spacious apartments in Hyderabad, top precast villament in Mysuru, and plots in Tamil Nadu and Pune as well.