How to Calculate Your Property Tax?

One of the wishes that everyone in India has deep down in the heart is having their own home. If it gets fulfilled, then the person is considered fortunate. Yes, it is because other than clothing and food, shelter is one of the basic needs for anyone. 

But before taking the final step to buying a new home, you also need to go through property registration. Yes, you need to pay the property tax to become eligible to get the ownership of the home. 

Concerning the same, the owner needs to pay the stamp duty and registration fee once. On the other hand, property tax is a recurring expense that you need to continue paying every year. 

Many prospective home buyers are unaware of the property tax and how to pay property tax online. Let this post help you know how to calculate property tax and pay it online quickly!

What is the property tax?

The property tax is a fee that is asked by local municipal authorities. It is for maintaining basic amenities like sewage, roads, water supply, drainage, sanitation and more. The property tax that you pay differs from state to state. It is a key source of revenue for Government authorities not only in India but across the globe. Property tax in India is deep-rooted and is applicable to a building and land attached to it. Taxes are not applicable to plots that are vacant without any adjoining building. 

What factors determine property tax in India?

  • The size of the property and its location
  • Stage of the construction – under construction or ready to move
  • Property owner’s gender 
  • Age of the property owner 
  • The offered infrastructure by the municipal authority 

How is property tax calculated in India?

It is the task of the municipal authority to calculate the property tax in India. The taxation measured is on the basis of the worth of the property. Majorly, the property tax calculation is carried out in three ways: 

  • Capital Value System (CVS) 
  • Rate-able Value System (RVS) or Annual Rental Value System 
  • Unit Area Value System (UAS) 

  • Capital Value System (CVS) 

Under this system, the market value of the property is considered as the base for the measurement of the taxes. It gets calculated by the municipal corporation, and they also revalue it annually. It is done as per the infrastructure demand in the area.  

  • Unit Area Value System (UAS)

The UAS system is based on the size of the property, and the price gets fixed as per the property’s build-up area. Based on this price, the property’s yearly calculated returns get calculated, and taxes are levied accordingly. 

  • Rate-able Value System (RVS) or Annual Rental Value System 

This type of taxation system is dependent on the estimated rent of the property in a year and is fixed by the municipal corporation. The system does not acknowledge the overall rent collected on the said property. But it takes into account the gross rental income that can be earned by the property. While calculating the annual rent of the property, elements like the size of the property, amenities and locations are considered.   

How to pay property tax online?

With technological advancements undergoing in almost all sectors in India, you can now make payments online for property tax. You can do that on the official website of your respective state’s/city’s municipal authorities. Earlier, the process of paying the same was complex and time-consuming. Nowadays, you can do that online and save your time and efforts. Take a look at the standard procedure to pay property tax online: 

  • Go to the official portal of your concerned municipal corporation/authority. 
  • Select the ‘Pay Property Tax Online’ tab.
  • Feed the property ID and name as per the property records. 
  • Your entered data will now be verified. 
  • After your details get verified, the system will ask you to provide your Email ID and the contact number. 
  • You will receive the One Time Password (OTP) on your mobile phone. 
  • You will now need to use the received OTP to login. 
  • Select the assessment year for which you wish to pay the property tax. 
  • After you have filled all details, you can select your preferred mode of online payment from the available alternatives and pay property tax online. 

You are aware of the way property tax is calculated in India. Being aware of these aspects can help you be in complete control of the property taxes that you will pay.

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