In this article, Aditya Swarup discusses how to pay your property tax online.

Introduction

Every property is an asset which is taxable and it is collected annually by the local state government or Municipal Corporation, depending on the government policies. It is very important to pay your property tax but the complex process of filling lengthy forms and then standing a long queue makes it more harassing and this made us feel like paying our property tax a burden. So, to give reliefs to the property taxpayers, several Municipal Corporations across the country has introduced the online payment of property tax. Mumbai collects around 10000 crores, Delhi collects around 8000 crores and Bengaluru collects around 3000 crores as revenue in the year 2016-17.[1]

What is Property Tax?

Property tax is a local tax levied by the local state government or the Municipal Corporations depending on the government policies for maintaining several basic civic amenities in the area like roads, sewage system, lightening etc. This is paid annually or semi-annually and it differs from state to state even from cities to cities. It is a formal source of income of the local municipal bodies. It is basically levied on the rental annual value (ARV) of the property. Apart from the location and size of the property various other factors like age and income of the property also determine the ambit of tax.

On which kind of property is property tax levied?

In India, property tax is basically levied upon the real estate properties which mainly consist of buildings. Vacant plots of lands without any adjoining buildings are not liable to be taxed under this head.[2] The following types of properties in India are basically taxed under the head of Property Tax:

• Residential house
• Office Buildings
• Factory buildings
• Godowns
• Flats
• Shops
• Personal property: portable man-made property like cars, and other vehicles or types of machinery.
• Land: land in its rudimentary form, devoid of any form of construction.
• Improvements or upgrades made on land: man-made upgrades made on land that cannot be moved like building.
• Intangible properties: properties like patents, copyrights which can be contrasted with the tangible personal property like real estate, jewelry, electronics, and other items which can be physically touched and have some values.  

What is Property ID?

The Municipal authorities allot a unique identification number or provide every property a property id at the time of the registration of the property. This is the id by which every property which is registered under a particular municipal corporation during the time of registration of property which is also located in the government’s records which is required during the online payment of the tax. The municipal authorities provide this so that there should not be any confusion in determining the true owner of the property and also to differentiate properties from one another.

Valuation of the property

Before the payment of the payment of the property tax, the property is first valued which is done on the basis of certain criteria:

• Neighborhood area: generally a property near a big city or in any posh area is valued higher than the same property in other areas.
• Construction processes: the type of construction also adds a significant value to the property.
• Possession factor: number of possession of a property also determines its value
• Construction age: the date of construction also determines its value. Generally, a newly constructed property has more value than the other old buildings.
• Number of floors: as the no. of floors increases its value also increases.
• Covered area: the covered area also increases the value of the property. Generally, a property on a large area of land has higher value and if there is a single property covering a large area of land, it has high value then the same area covered by combining smaller properties.
• Empty area: the empty area also determines the value of a property. If the area covered by the property is large but only a little of construction is done on it then it will have less value.

How to calculate your property tax

There are many methods for the calculation of the property tax but when we are trying to pay the property tax online, the websites of the concerned municipal corporations automatically calculates the property tax of the property by the provided details about the property. It is generally calculated on the valuation of the property. It is also calculated on the basis of tax rates, amount dues and rebates on the corporate websites.

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Guidelines for the online payment of property tax

The introduction of the online platform for the payment of property taxes by the different municipal corporations throughout India has made the payment of the property taxes very convenient and easy, irrespective of their time zones and location. A majority of the municipal corporation throughout India has introduced the online platform for the payment of the taxes and a number of the municipal corporation who are not able to bring this are trying to provide this facility as soon as possible to make this lengthy and complex possess hassle-free.

We can pay our property tax online through the state or municipal website by filling your Property Tax Number or Revenue Survey Number or Khata Number. Here are some of the guidelines that one should keep in their mind if we prefer to keep in mind before our paying our property tax online:

• If there is a balance after one has paid his tax in advance after adjusting the dues from the previous year(s), if any, you will receive extra money through DD or cheque post verification.
• Property tax for the particular financial year includes the pending amount or any dues from the previous year(s) if any amount was not paid last year(s) due to some reason or another.
• If one is opted to pay the property tax for the financial year into two installments then one has to use the same form for the second installment also.
• If one is willing to pay the whole amount in one installment then generally there is a 5% rebate on the total amount. However, it depends upon the existing laws and it varies from place to place.
• Payments of the arrears of the previous year(s) can only be made after the challan of each of the previous year(s) have been generated.
• Receipt for payment through cash or DD is generated instantly but the receipt of the tax paid through the cheque can only be granted only after the cheque amount has been released by the bank.
• An interest of 2 percent per month is generally charged on the tax amount from the defaulted period. However, this also varies from the place to place and according to the law made by the local government or the municipal corporation under which it has been charged.

Procedure for the online payment of property tax

There are some of the standard procedures for the payment of the property tax but it differs from place to place. Firstly, we will be discussing the standard procedure that we will be discussing the procedures of some of the major cities.

• Click on the ‘Property Tax’ option which is given in the particular website of the local state government or the municipal corporation under which it comes.
• There is a need for the proper care to be taken before selecting the categories of property for the type of property which we are paying the tax. The form also guides about the changes which have been made in the website and us to take proper care during the selection of the property according to the changes made by the authorities.
• Then we have to select the year of assessment, that is, the year for which we have to pay our taxes. This includes the tax of the current finical year as well as all the impending dues from the previous year(s) which has not been paid due to some reason.
• Then we to fill our Property Identification Number/ Property Tax Number/ Revenue Survey Number/ Khata Number and other essential details like name of the owner, property details, type of property, relevant locality etc. and other necessary details.
• Then we have to select our preferred payment gateway, that is, internet banking/DD/Debit Card/ Credit Card to complete making the payment.

Let us take a look at how to pay tax online in Delhi.

• Firstly, got to www.mcdpropertytax.in, which is an official website for the payment for property tax provided by the municipal corporation of Delhi. Then we have to choose our municipal corporation, that is, North Delhi Municipal Corporation, South Delhi etc.

• Then we have to read the terms and conditions and then we have to check the box next to ‘I have read and I accept Term and conditions mentioned above’.

• Then click on the button saying ‘Click here to fill property tax…’

• Then we have to enter our property ID and submit it.

• Then we have to provide all the necessary information about the property. One should recheck these details as wrong information attracts direct penalty.
• Then we have to choose the year for which we are paying the property tax.
• Then we to choose our payment mode, that is, credit card/debit card/ net banking etc.
• Then we have to submit our payment and a receipt will be generated. One should print this receipt instantly.
• Then we have to save our challan generated after the payment process.

Things to remember

• Remember to check all the pre-filled data because it is on the basis of these that you get certain rebates on our property tax, which is discussed earlier in this article.
• If there is non-submission due to any reason, then it will attract certain penalty with interest with the tax.
• Also, we have to pay the tax on the prescribed time limit provided by the authorities as late payments also lead to the extra charge.
• Generally, a rebate of 2 to 25 percent is being offered by the different municipal corporation across India to boost the online payment.
• There is also a provision for an additional concession for the property owner who is women and senior citizen. One should look for this type of concession which is generally given in the notice box of the website.
• Wrong or any type of misleading information provided by the property owner during the payment of tax or any mistake made about the information of the property attracts direct penalty.

Property exempted from the Property Tax

There are certain properties which are exempted from the property tax. This includes:

• Cremation ground
• The property which is being used for charitable purposes
• Government buildings
• Heritage buildings
• Public places for worship
• Agricultural land.

Scope for the online payment of Property Tax in India

In India, the concept of Property tax was introduced to wipe out excess gains arising out of the property and to reduce inequalities in income and wealth. Interestingly, in India, this is considered trivial. This approach is prevalent because the Central Board of Direct Taxes gives more preference to the other taxes like Income Tax, Corporate Tax etc. However, non-payment of these taxes attracts a large penalty. After the introduction of the online payment of these taxes, there is a severe increase in the number of taxpayers. But the result is not the same as it was expected. There is a need of awareness made to the general public and this has to be done by the local municipal corporation as soon as possible so that there must be a fear among the taxpayers for the non-payment of these taxes. Also, there is a need for all the municipal corporations to introduce this online tax payment system so that the payment of these taxes becomes easy.

Conclusion

So we have looked all the procedure related to the online property tax payment as provided by the different municipal corporation and looked a standard procedure for the payment of these taxes. However, after this also people are not aware of the property tax in India. Very few people know that there is also an option to pay these taxes online. Generally, people who are not aware of these taxes generally are not able to pay due to the complex offline tax payment. So there is a need for awareness about this among the people as the tax is one of the main sources of income of the government which is used for the public welfare programmes.

References

[1] Retrieved from https://www.bemoneyaware.com/what-is-property-tax-how-is-it-calculated-and-paid/ , on Nov 19, 2018.

[2] Retrieved from https://economictimes.indiatimes.com/definition/property-tax , on Nov 19, 2018.