Steps To Paying Property Tax

Property tax depends on the area that you reside in. The amount collected as property tax by a municipality, a municipal corporation, or a panchayat within a state or city differs according to the levy type of the locality, facilities available, and other factors. The formula for municipal tax calculation is:

Tax on property = base value of the property * type of the building * age factor * built up area * floor factor * use category

This is the manual method of calculating. But, you can also compute the property tax online. Property owners can pay their taxes online or offline. Regardless of how you pay your tax, make sure that you collect the tax receipts after paying. These documents are required when you apply for certain financial instruments or when you wish to claim certain benefits, such as the loan against property tax exemption.

What Are The Required Documents To Pay Property Tax Online?

You do not require any other documents except the property tax bill, which the municipality usually delivers to the property’s address. This bill has all the details, which you will be required to key in while making the property tax payment online.

What Are The Different Ways For Paying Property Tax?

What Are Some Of The Things You Need To Know About Paying Property Tax Online?

Before you calculate how much tax you require to pay, you will have to be aware of a few details about your property. These details include classification of your property, its location, and its dimensions. Some of the details that you will need to gather are:

• The annual value of the property
• Categorization of the property as residential or non-residential
• Classification of the property as residential, non-residential, vacant lot, billboard, shop, etc.
• Zonal classification
• The property’s dimension
• Built-up area or the sum of the carpet area and the area inhabited by the walls of the flat.
• Number of floors including the basements also.
• Built up area of each floor
• Electricity bills
• Exemptions - certain types of properties, such as care centers for stray animals are exempted.

Steps To Paying Property Tax Online

Step 1: Visit the official website:

Visit the official website of your municipality for paying the property tax. All the municipalities have their respective official websites.

Step 2: Select the ‘Property Tax’ option.

Step 3: Select the property type - residential or commercial. Ensure that you make the right selection to avoid errors.

Step 4: Enter your property tax number, revenue survey number, or Khata number. This number will be on your property tax bill.

Step 5: After entering the number, select the assessment year for which you want to pay the property tax online.

Step 6: Ascertain the property details.

When you enter the property tax number and the assessment year, a form will open with all the details about the property - owner’s name, total area, usage type, etc. Verify all the information and ensure that all the details are correct. Also, at the bottom, you can see the total remaining property tax. This should equal the amount mentioned on your property tax bill.

Step 7: Choose the mode of payment

After verifying the accuracy of all the details, go ahead and select the payment method. Internet banking, credit card, or debit card are the common payment options available for all municipalities. You will now be redirected to the payment portal and can complete the payment from here.

Step 8: Receipt or the challan

If the transaction is successful, you will get a challan or receipt for the same. Take a print out hard copy of this receipt for future reference. You have successfully paid your property tax.

Online Property Tax Payment- Simple and Quick

Every municipality has its own website, and the method of paying the online property tax will differ slightly from the steps above. The screenshot below shows the official website of Chennai Corporation.

Select the online payments option.

Select the property tax payment option

Enter the details, such as zone number, bill no:, sub no, and division code. Choose yes/no to answer the question - Have you recently made modifications to the property? Click Submit.

Online payment of property tax is easy and simple. It enables you to make the payment within minutes. Ensure that you always pay the property tax before the due date, since late payments come with penalties as huge as 20%.

What Are The Three Ways In Which Property Tax Can Be Computed?

There are three chief ways in which property tax is calculated:

Capital Value System (CVS): The tax is levied as a percentage of the market value of the property. It is decided by the government based on the location of the property. The market value is revised and published annually.

Annual Rental Value System or Rateable Value System (RVS): Under this system, the tax is computed on the annual rental value of the property. This does not necessarily have to be the actual rent amount collected. Rather, it is the rental value determined by the municipal authority based on the size, location, condition of the premises, nearness to landmarks, facilities etc. Instances of municipalities that have adopted this system of property tax include Hyderabad and Chennai.

Unit Area Value System (UAS): Under this system, the tax is charged on the per unit price of the built-up area of the property. This price is standard (per square foot per month) and is based on the expected returns of the property according to its location, land price, and usage. It is then multiplied by its built-up area. Municipalities like Delhi, Kolkata, Bengaluru, Patna, and Hyderabad calculate property tax based on this system.

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