Land Tax and What it Basically Means

Have you wondered what is land tax? Various Indian States have their own portals for paying land tax online. There are several land tax online payment mechanisms existent in India along with other land tax quick payment facilities. There are dedicated provisions for payment of village land tax online and also urban or semi-urban land revenue taxes likewise. Every portal for land tax e payment has its own dedicated land tax login facility for users. Hence, people can work out the tax on land sale or purchase and also make online land tax payments alongside.

The big question is that when we are talking of land property tax, who imposes the same? This land value tax is calculated on the basis of several factors including land depreciation or even land value increment tax. Additionally, there is a different sale of land tax treatment as compared to regular land assessment and land tax online quick pay likewise. Then there are factors like GST on land purchase or GST on sale of land which should be accounted for while understanding the land tax meaning. The land tax online services at most States usually include calculation of land tax rates online, dedicated facilities for property tax on agricultural lands and other residential lands, downloading or accessing land receipt online, land records and so on.

The tax is one of the biggest income sources for city and village municipal and other bodies. Various methods are used for calculating the land tax rates or the land taxation value for every property. This tax has to be paid either once or twice every assessment year, to the local municipal authority in an area. The revenue that comes from collecting land taxes is used by civic and governing bodies for enhancing area wide infrastructure including maintenance and provision of amenities like power supply, water supply, roads, lighting, cleanliness and sewage systems among others. With varying civic authorities throughout Indian States, there are diverse valuation methods and rules in place. The tax rates differ across the country as a result.

Who is liable for payment of land taxes?

Owners will not have to pay land taxes if the plot remains vacant. However, this is not applicable for any vacant house and its owner. Land and property tax is not the same as what you are paying every year as income tax. You have to pay taxes on real estate properties on your annual income under the head called income from house property as per the provisions of the Income Tax Act.

Calculation of land taxes

On the basis of multiple factors including the amenities, location and size, civic authorities usually attach annual values for properties in their areas, with a view towards ensuring smoother collection of land taxes. Yet, they have varying methods for working out these figures. There are three methods of calculating land values and these are applied by several municipal and civic authorities in the country with a view towards establishing an annual payment liability. Municipal bodies in Hyderabad and Chennai make use of the method for calculation of annual property values. Every property will have its own potential for generating a specific monthly rental, irrespective of whether or not it has been rented out actually. On the basis of this rental value of a property, a particular percentage of the earnings will have to be paid out as land tax.

Municipalities in cities like Kolkata, Delhi, Bengaluru, Ahmedabad, Patna and Hyderabad make use of the unit area value system. Under this system, the per unit price is fixed on the basis of the carpet area or built-up area. While the value is being fixed, the usage of property and location will have a major role to play. The tax rate is applicable on the basis of expected returns from the property in question. The BMC (Brihanmumbai Municipal Corporation) initially desired framing of regulations for imposing property taxes on the basis of the capital values for properties. Yet, the Bombay High Court abolished the order in the year 2019. Under the system, the property’s market value, which is annually revised by the civic body, is used for working out the land taxes.

Payment of land taxes

Most civic bodies and land authorities have already gone digital in recent years, with a view towards enabling more convenience in paying land taxes online. Websites of municipal authorities and other organizations may be used for payment of taxes while some even offer mobile phone app facilities for payment as well. Land tax may be done with the unique ID and PIN for the property. Payment may be done through debit and credit cards along with mobile wallets and net banking in some cases as well. You may also pay the taxes offline by visiting your nearest municipal or civic authority’s office. Here, you can fill up and submit your applicable form while making a payment via cheque.

Land tax rebates

There are several rebates often provided to citizens by municipal organizations across India. These are based on several parameters including the age of the owner, i.e. the rates are lower in case of senior citizens, the nature of the area, i.e. rates are lower for properties situated in flood-prone zones, usage of the property, i.e. rates are lower for those properties which are meant for public usage or owned under charitable trusts. In some cities, old properties usually draw lower taxes while some cities have lower rates if occupants have stayed for a longer period of time. Land tax rates are often lower for those from lower income groups and economically weaker sections of society.

You Might Also Like

• 3, 500 homes to be constructed under PMAY by Pune civic body
• Infrastructure Projects Gain Major Share Of BMCs Budget
• Positive trends seen in Hyderabad real estate market with more launches
• Pune: Initiatives taken for the Smart City Development
• Vancouver witnesses lower home sales and slight increase in prices

Frequently Asked Questions (FAQ’s)