How To Calculate Property Tax

Post Details
Post By By Buniyad

08/23/2018

Taxes are one of the major sources of revenue for the Government which helps them in funding various amenities to be provided to general public of the Country. Taxes are of different kinds such as income tax, Goods and Service Tax, Professional Tax, Property tax etc.  Certain taxes are levied by the central Government and proceeds are collected and disbursed centrally and certain other taxes are state specific and revenues are received by various states departments and municipal corporations for the purpose of funding State budget.

Property tax is a local tax and it is collected by local municipal authorities from the property owners residing in a particular locality. Property tax is levied for all types of residential units such as individual houses, Flats, and apartments, shops, godowns as well as vacant land .The tax so collected is utilised to provide basic civic facilities and services to the residents in the city, such as roads, parks, sewer systems,  street light connections, water tank erection, maintaining the cleanliness of the city etc so . Property tax is collected every six months.  Property tax being governed by State Government and further delegation to various municipalities results in difference in basis of levy, computation, mode and manner of its payment.

Property owners are liable to pay property tax to Local Municipality authority operating in their area. In Delhi it is governed by Municipal Corporation of Delhi (MCD)

The MCD follows Unit Area Value (UAV) system, for calculating the amount of property tax. The UAV is based on expected returns from the property, depending upon its location, valuation of the property and nature of usage of the property (rented or for own use).  The computation of property tax is based on the below formula.

Property tax = Annual value x Rate of tax

Annual value = Unit area value per sq metre x Unit area of property x Age factor x Use factor x Structure factor x Occupancy factor

Rate of tax: Tax rates for properties in categories A to H are published by the MCD every year.

Unit area value: This is a value given for one sq metre of the built-up area of a property.

Unit area of property: The built-up area in sq metres is taken into consideration for computation.

Age factor: The total no of completed years since the property is built

Use factor: Whether the property is used for residential or commercial segment

Structure factor: RCC constructions are taxed higher than low value constructions.

Occupancy factor: Property is for own use or given in rent

Recent Post

favorable Real estate investment opportunities.
Before You Invest: Essential Insights into Real Estate Ventures

Are you planning to buy a property […]

Gateway to Growth Explore Commercial Real Estate in Noida
Gateway to Growth: Explore Commercial Real Estate in Noida

Noida, part of India’s National Capital Region, […]

property investment in Noida
Building Wealth for Tomorrow: The Power of Property Investment

Investing in real estate means more than […]

Deciphering Floor Space Index (FSI): Definition, Computation, and Significance
Deciphering Floor Space Index (FSI): Definition, Computation, and Significance

Embarking on property investment is a transformative […]

Demystifying Stamp Duty in India
Demystifying Stamp Duty in India: A Comprehensive Guide

Acquiring property is a substantial and intricate […]

Living Luxuriously: Exclusive Areas in Delhi
Living Luxuriously: Exclusive Areas in Delhi for 2024

The Delhi-NCR real estate market is poised […]

Elevating Your Bedroom: 40+ Luxury Design Ideas for a Stylish 2024
Elevating Your Bedroom: 40+ Luxury Design Ideas for a Stylish 2024

In the realm of luxury bedroom design, […]

Luxury Homebuyers
Essential Considerations for Luxury Homebuyers: A Guide by Nitara Projects

Luxury living, epitomized by builders like Nitara […]

Leave a Reply

Your email address will not be published. Required fields are marked *

Buniyad Blog is proudly powered by WordPress