What Is Property Tax?
The Property Tax is imposed on various types of real estate properties paid by the current property owner. Properties such as; commercial buildings, residential properties, and plots-based land. The purpose of buying these properties may differ. People invest in real estate to accommodate themselves, for a business purpose, or to sub-let the owned property for regular earnings. The government of India collects property tax from landowners through state governments or the local authorities. One is liable to pay property tax under the Income Tax Act of 1961. Every individual must pay the property tax that buy property anywhere in 28 states in India. However, the tax law is different in all these states in the country. So, one needs to abide by the state property tax rules. You can pay dues using Online or Offline payment methods.
Types Of Property
Real estate properties can be sold in various categories, but majorly property is divided into three major heads; (i) Commercial Land, (ii) Residential Property, and (iii) Plot-based Land. You must understand the nature of your property before calculating and paying the applied taxes.
- Commercial Building or Land
Any building, land construction, or office layout built for commercial trading purposes is categorized under this head. Commercial properties are used for various business purposes for monetary gains. The commercial building is used by the business owner, or it can be rented out to others for the business. - Residential Building or Property
Residential property is also called domestic land. The investment in such properties is personal. The majority of people buy houses, residential buildings, and villas for their stay. However, residential properties are sub-let to tenants to earn extra perks. No commercial activities are allowed on the domestic property - Raw or Structured Land
This is the third type of real estate property on which the property tax is collected by the government. It can be a raw piece of land or a land with boundaries. People invest in such properties for different capital gains. One can construct a dwelling house, a commercial shopping center, a building for a school, college, dispensary, and hospital for society, or a piece of land that can be used for agricultural activities.
How To Pay Property Tax?
It is easy to make the payment of property tax offline or online. One needs to follow the standard procedure for the tax payment. The point of contact is predefined to pay different property taxes.
Offline Method:
- Visit the Municipal Corporation office or the authorized government body to collect the tax on property purchased.
- You need to fill out a form stating all the required information and details of the purchased property for example; location, property type, size of the property, total purchase amount, etc.
- After getting the document verified by an official, you can make the payment of calculated property tax at the payment window.
- You can make the payment using offline or online payment methods, or as guided by the department.
- Once the payment is made, you will receive a receipt of the tax paid.
Online Method:
- Visit the official website of the state municipal corporation office or the authorized government body.
- Locate the option for property tax payment, and click on the given link.
- Now, choose the online payment method and proceed further by selecting the type of property bought.
- You will be directed to a standard format asking for your details and information about the property purchased. Fill out the form carefully and cross-check for any spelling mistakes.
- Fill in the property location, size of the property, total amount purchased, revenue survey number, plot number, identification number, etc.
- Choose the tax assessment year, and proceed with the payment option.
- Make the payment by selecting the online or offline payment mode.
- Download the tax payment receipt at the process end.
Steps To Download Property Tax Receipt Or Challan Online
Step 1 – Visit your state government’s municipal corporation office website.
Step 2 – Login to the citizen’s account by entering the OTP received on the registered mobile number.
Step 3 – The format of property tax paid will appear on the screen displaying all the filled information.
Step 4 – Click on the ‘Action’ option and it will direct you to the form.
Step 5 – Download the online tax payment receipt for your future reference.
Calculation Of Property Tax
The standard method of calculating the property tax;
Property Tax = Base Value x Built-Up Area x Age Factor x Type of Building x Category of Use x Floor Factor
Property tax calculation may differ state-wise because every state has its way of calculating the property tax applied on the purchase of any property. However, the base factors to calculate the property tax will remain the same as mentioned above.
The property tax is calculated based on these factors. You can visit the state municipal corporation’s website to calculate an exact tax amount as per the governed rules.
All Property Tax Rates Across The States In India
| State | Residential Properties (% of ARV) | Commercial Properties (% of ARV) |
| Andhra Pradesh | 0.10-0.50% | 0.20-1.50% |
| Arunachal Pradesh | Varies significantly by locality | Varies significantly by locality |
| Assam | 5-10% | 10-20% |
| Bihar | 5-15% | 10-25% |
| Chhattisgarh | 2-10% | 5-20% |
| Goa | 0.10-0.50% | 0.20-1.00% |
| Gujarat | 0.50-1.00% | 0.50-2.00% |
| Haryana | 5-15% | 10-25% |
| Himachal Pradesh | 5-10% | 10-15% |
| Jharkhand | 5-10% | 10-20% |
| Karnataka | 0.20-0.50% of UAV | 0.20-0.50% of UAV |
| Kerala | 0.30-1.00% | 0.50-3.00% |
| Madhya Pradesh | 5-10% | 10-20% |
| Maharashtra | 0.316-2.296% of Capital Value | 0.652-3.91% of Capital Value |
| Manipur | Varies by locality | Varies by locality |
| Meghalaya | Varies by locality | Varies by locality |
| Mizoram | Varies by locality | Varies by locality |
| Nagaland | Varies by locality | Varies by locality |
| Odisha | 5-10% | 10-20% |
| Punjab | 5-15% | 10-25% |
| Rajasthan | 5-10% | 10-20% |
| Sikkim | Varies by locality | Varies by locality |
| Tamil Nadu | 6-12% | 10-25% |
| Telangana | 0.125-0.75% | 0.50-3.00% |
| Tripura | Varies by locality | Varies by locality |
| Uttar Pradesh | 2-10% | 5-25% |
| Uttarakhand | 5-10% | 10-20% |
| West Bengal | 11-40% | 30-45% |
The data shown in the above table is based on hypothetical values. You can cross-check with the state governments’ applied property tax slabs for the latest percentage. However, you can consider this percentage slab index to understand the basic criteria of calculating the state-wise property tax on the property owned by an individual.
Different Methods Of Calculating Property Tax
Property tax is calculated considering one of these three methods based on the type of property purchased. If you understand these methods, you can calculate the valid tax on the purchased property next time.
Unit Area Value System (UAS)
Major cities like Bengaluru, Delhi, Hyderabad, Kolkata, and Pune use the UAS property tax calculation method to determine the exact tax payable against the property owned by the citizens of these respective cities. The total built-up area is multiplied by the evaluated value of the property based on the current market price, location, and purpose of buying the property.
Capital Value System (CVS)
The property tax is calculated considering the CVS method in Mumbai. A percentage of the current market value of the property based on the area and locality is set as a property tax under the Capital Value System. The market value is updated every year, so stay up-to-date.
Ratable Value System (RVS)
RVS is also known as the Annual Rental Value System mostly used in Chennai and Hyderabad cities in India. The property’s rental value is calculated considering several factors such as; condition, location, size, offered advantages, and proximity from the location. And based on the rental value, the property tax is finally calculated.
How To Get A Property Tax Application Number?
If you don’t know how to get the property tax application number, here we would like to guide you, on how to get it.
Step 1 – Search the address of your respective state municipal corporation’s office. Click on the link to the official website.
Step 2 – Go to the ‘Property Tax Page’, and click on the GIS-based New PID.
Step 3 – You will be directed to the option ‘To Know Your New PID Click Here’.
Step 4 – Now enter the old application.
Step 5 – Go to the ‘Search’ option. Select the name then execute the search.
Step 6 – Overview of all the details shown on the screen.
Step 7 – Now click on ‘View Your Property in Map’ for more details. Now look for your property on Google Maps online.
Step 8 – Download or Save the document for future reference.
Conclusion It is necessary to clear the dues of property tax valid on the purchased property. It is suggested that you should check for any past tax dues of the previous owner, and clear it there & then. This information will guide you, on how to calculate, and make the property tax online payment easily. Make sure you pay all the due taxes on the property purchased.
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