What is Property Tax?
If you own a home, you will be expected to pay property tax to the urban local authority under which the property lies. If your property is in Delhi, for example, you will have to pay taxes to the Municipal Corporation of Delhi (depending of which subdivision of the trifurcated MCD you belong to).
Even though paying property tax may sound inconvenient, paying property tax on time will allow you to benefit from discounts for early tax payers. Moreover, paying late will invite fine. If you default on property tax payment, it may even invite punishment. But, this is less of a hassle than you seem because property tax in India is unusually low by global standards.
In Delhi, the property tax you pay depends on the residential colony in which you own a house, the area of your house, how old your house is, occupancy and many such factors.
There are rebates if you are a senior citizen, a handicapped person, a woman or a former service man. But, the rebate would not apply, if you rent out the property to someone else. The property has to be self-occupied to claim property tax rebate.
Under many municipal corporations, if you are late to make the payment, the amount of money you are expected to pay will rise according to the time that passed by. For example, the property tax amount you are expected to pay in July may be greater than the amount you are expected to pay in June. Some properties, like central government properties, are exempted from property tax. Places of religious worship are exempted from property tax. But, this does not apply to homes. You must pay property tax annually.
Many municipal corporations, including the municipal corporations in the National Capital Region, allow you to pay your property tax online. So, for many urban Indians, the process is easier than ever. You do not have to physically visit government offices as frequently as you did. Earlier, people had to stand in long queues to make property tax payments to Municipal Corporation of Delhi.
Municipal corporations like North Delhi Municipal Corporation recently decided to allow property owners to make property tax payment through net banking. In Delhi, the online property tax payment system allows home buyers to make payment through various payment centers like banks. Many municipal corporations like the ones in Mumbai and Delhi have online property tax calculators too. In many parts of India property tax is calculated according to the rent paid.