How to Pay Your Property Tax?

Funds collected through property tax are used for the development of your locality. This is why it is important you pay your property tax on time. And, the growing usage of technology in government offices has made the process rather simple.

What is property tax?

Levied by the urban-local bodies such as municipal corporations, funds collected through property tax are used for maintaining basic infrastructure. As this tax is levied by local authorities, there is a variation in their assessment, rate band, valuation and payment procedure from city to city. Referred to as a house tax in common parlance, property tax is also applicable to various residential, commercial, institutional and official establishments. Properties are categorised under 70-80 heads and rates vary for each head. So, one must ensure that his property in evaluated under the proper category. Apart from property tax, there might be certain other charges as well like water tax, sever charges, etc., which also need to be paid. Property tax is levied on the annual rental value (ARV) of your property.

Identification

There is a unique identification number allotted to each property, which is subject to taxation. This unique ID can be used to locate the property in government records. This number also allows you to use the e-portal to file the property tax online. For example: Your address might be B-23, Imperial Towers, Sector 51, Noida, but you would require the ID number for all taxation and related purposes.

You can locate this number from your last property tax payment receipt. After getting your property registered with the municipal authority, this ID number is generated.

Evaluation of property tax liability

Municipal corporations issue guidelines from time to time and property owners are supposed to do self-assessment of their tax liability based on them. A periodic scrutiny and revision in also undertaken by your municipality. If you undervalue your property in your self-assessment, you may face hefty penalties. For example, Section 152A of the Delhi Municipal Corporation Act, 1957, provides for prosecution for willful furnishing of wrong information.

Exemptions

These entities are given an exemptions in property tax:

• Public charity
• Public worship
• Burial/cremation ground
• Heritage land or building
• War widow/ gallantry award winner
• Government buildings
• Foreign consulates

Valuation

Your property is evaluated according to:

• The locality
• The vicinity of public parks/width of roads
• The structure (pucca/semi-pucca/kutcha)
• The occupancy factor (rented/self-occupied/ semi-rented
• The year of construction
• Usage of premises
• The floors
• The covered area
• The vacant land use

(For example, valuation of a flat in Mumbai is done by the following formulae: Property tax = base value × built-up area × age factor × type of building × category of use × floor factor.)

ARV in case of rented property is maximum of the following:

• Municipal valuation
• Rent received
• Fair rent as determined by the Income Tax department

Timely payment a must

To encourage timely payment of property tax municipal authorities give certain rebates and discounts. In case of a default, you may face a penalty or face actions such as disconnection of water or power facilities, etc.

For the convenience of people, there are camps arranged from time to time where relaxation and rebate is given to past defaulters so if you have for any reason defaulted in the past you can avail that opportunity to clear off all your pending dues.