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Things You Need To Know Before Availing Benefits on Property Tax

Every land-owner has to pay an amount to the local government or the municipal corporation of their area as an owner of the property. This amount is simply called as the property tax. The term can encompass all tangible real estate properties such as a house, office building and the property that has been rented to others. 

Not paying property tax is a criminal offence in India. Therefore, individuals must be aware of what kind of properties are taxed, the amount they need to pay, and how to pay taxes online or offline as per their convenience.

What kind of property is subject to property tax?

In India, Property Tax is applicable to all properties and open lands within Municipal Corporation limits. Usually, central government properties and vacant properties are exempt from property taxes. Besides these, residential homes (self-occupied or rented out), office buildings, flats, factory buildings, stores, etc., are also subject to property taxes in India.

How to pay property tax online?

If a municipality offers an online facility to pay property tax, then can citizens surely opt for it. Given below are the steps for online payment:

Step 1: Visit the official website of the concerned municipal corporation. 

Step 2: Navigate to the concerned page of the payment of property tax.

Step 3: Now provide all necessary information on relevant places, such as assessment code, area details etc. 

Step 4: Taxpayers might also need to provide additional details, such as the old assessment number, owner number, and door number.

Step 5: After that, follow all necessary instructions and continue to provide the required information. 

Step 6: Finally, complete the application process by paying the required amount. Individuals can keep the proof of payment for future reference. 

What if you want to pay property tax offline?

To pay property tax offline, individuals must visit their municipal corporation office and follow their steps to pay tax successfully. Before paying property tax, citizens must know the methods to calculate property tax. 

What are the ways to calculate property tax?

The three primary ways by which property tax is calculated are: 

Capital Value System (CVS)

A percentage of the property’s market value is used to calculate the tax. This is based on the property’s location, and the government determines this market value. Every year, a new version of the market value is issued, and one of the best examples in this regard is Mumbai. 

Regardless, if you are applying for a loan against property in Mumbai you must understand the fees and loan against property charges and must opt for a property that gives optimum value. 

Annual Rental Value System or Rateable Value System (RVS)

The annual rental value of the property is used to determine the tax under this scheme. However, the rental value determined by the municipal authorities based on the size, location, condition, proximity to landmarks, facilities, etc., is not necessarily the amount of rent collected. Hyderabad and Chennai are two examples of municipalities that use this property tax scheme.

Unit Area Value System (UAS)

This approach assesses the tax based on the built-up area of the property’s per-unit price. Furthermore, based on the expected returns of the property given its location, land value, and intended use, this price is fixed (per square foot each month) and then multiplied by the built-up area. 

This system is widely used in several municipalities, including Kolkata, Delhi, Bengaluru, Patna, and Hyderabad to calculate property taxes. Hence, individuals should be cautious about the features that can increase a property’s value.  

Important parameters to know about how to pay property tax online

It is essential to know that before proceeding with online property tax payments, taxpayers must have the necessary information. These specifics are related to the loan against property documents, location, size, and classification of your property. Nevertheless, a few parameters include: 

  • Classification of the property
  • Yearly value of the property
  • Dimension of the property
  • Zonal Classification
  • Number of floors
  • Built-up area
  • Electricity bills
  • Other exemptions 

Nowadays, buying a property can be a daunting task for many. Hence, some financial institutions offer pre-approved schemes that simplify and expedite loan processing. Applicants can enter their name and contact number to check their pre-approved offers. It is important to note that steps and processes can differ with municipal corporations across the country. Hence, check the concerned website thoroughly before paying your property tax.


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