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What is Property Tax?

Property tax is paid annually on all the property you own. This includes the house that you live in, holiday homes, and any investment real estate that you might have purchased. Property tax Must also be paid on any office property that you might have and any property that you might be renting to other parties. However, central government properties and any properties lying vacant might not be subject to property tax. If you were renting out property that has been lying vacant during the lockdowns, be sure to show up for paying your taxes because you might just need to pay a rather negligible sum at this point. 

Exemptions may additionally exist for agricultural properties and in instances where properties are used to care for the homeless or for stray animals, for places of worship and so on. 

Property tax is used for the maintenance of amenities in your neighborhood including the sewage system, roads, street lights, footpaths and even public parks. 

Who is property tax paid to? 

Property tax is paid to the local municipality office. You can either approach the local municipality office nearest to your home, or in your neighborhood or else, you can pay property tax online. 

How property tax is calculated

The local municipal corporation in your zone will make an assessment of what property tax will need to be paid during a given period. The tax calculations will account for the area of property owned, the area (in terms of location), the type of construction and so on. It also takes into account the gender profile.

You can use an online tax calculator or do your own tax calculations using the following formulation: 

Property tax = base value × built-up area × Age factor × type of building × category of use × floor factor.

Lower taxes and rebates may exist for properties that are owned by women, senior citizens, citizens who served in the military and so on. 

Note that different municipal corporations might have different tax calculation methods. 


How to pay tax online for your property:

Especially amidst lockdowns and social distancing norms, many people might prefer to pay taxes online rather than risking a crowded government office, forms changing hands and so on. It is also an easier way to pay your tax obligations when you are tied up in the office. 

If you intend to make pay your property tax online, follow this 5-step guide. 

Step 1: Gather all relevant details on a notepad or Word doc or Google Doc or on your email for ready reference. Go in ready with: 

The property’s “annual value”

Property classification 

Zonal Classification

Property dimensions

Property’s built up area

Number of floors of your property (this will include basements too)

Built up area of each floor

Electricity bills being paid

Exemptions, if any are applicable (like places of worship) 

Do also ensure you have a stable internet connection.


Step 2: Get the correct municipal corporation website. Beware of fraudulent and phishing websites. Do not follow any random emails with funny addresses using numbers and characters, that might say “pay property tax easily” in your email. Go to the municipal corporation website. 

Step 3: Toggle the options on the website till you find the appropriate property tax payment tab. 

Step 4: Enter all the details that you have conveniently gathered alongside. You might also need to enter your/ the owner’s name and mobile number. 

Step 5: Take a screengrab of the payment confirm and save it carefully or else if you get a receipt, download it and file it carefully. 

Pay tax on time

It is very important for property-owners to pay their taxes in time so as to avoid paying fairly heavy penalties levied on non-payment. 

Some municipal corporations might also walk in and seize belongings, including furniture from homes and offices where property tax defaults and delays are ongoing. For example, in 2020 Mumbai’s BMC said that it would begin seizing valuables from property tax defaulters, starting with commercial properties and then moving on to residential. 

Non payment of property tax can also present issues when you intend to sell your house. 

Conclusion: Property Tax is an obligation by all property owners but there are exceptions. Be sure to show up to pay your tax (online or offline) and claim your exemption if any is applicable. However do not avoid paying your property tax as it can invite a raid and seizure of valuables or can present you with issues when you try to sell the property. 

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