Municipal Corporation of Delhi (MCD)’s greatest revenue sources come from the property taxes. It is applicable for all other urban/local government globally. This MCD property tax remains the liability to be paid by real-estate owners on all properties, lands, including vacant land. All property taxes are revised annually by the MCD.
Property owners are often uncertain about paying property tax or house taxes in Delhi, but they should to prevent legal aggravations and start benefitting from the tax returns.
Steps To Calculate MCD Property Tax:
● The MCD practices formula for System of Unit Area (suggested by the Indian Government) to calculate property taxes. All building type (residential, institutional, commercial, industrial) uses various property tax rates.
● System of Unit Area uses the tax paid on the property as:
a. The period when constructed
b. The job of the built-up area
c. Structure of the building
d. Location of the building
e. Property type
● For residential property A or B, the property tax stands at 12%. The type C, D and E will have a tax rate of 11%. And for property type F, G and H, the rate of property tax will be 7%
MCD Property Tax Formula:
Property tax = Annual Value multiplied by Tax Rate.
Annual Value is the multiplied total of Unit Value of the area, Property Age Factor, Property Use Factor, Property Structure Factor, Apartment unit factor and Possession Factor (occupancy)
In the System of Unit Area,
Annual Value = Annual Value x Rate of Property tax
Understanding the terms:
● Unit value of the Area per Sq. mt. is the value of built-up space per Sq mt.
● Covered property area: this comprises of the floor area, including the thickness and area covered by the veranda, cover area of the staircase, garage.
● The property age which regulates the property tax rate. Taxes on the new property are always higher than in an old property.
● The property usage features allocated by the MCD defines how the property is used.
● The property structure feature determines whether the property is a kaccha house, pucca house or semi-pucca house.
● Occupancy factor determines whether the property is rented or self-occupied.
● The flat feature differs based on the total enclosed area of the flats.
Considering the above formula, let's calculate the property tax:
Formula: Annual Value = Unit value for the area * unit area * age factor * use factor * structure factor * occupancy factor
Question: Property size: 100 sq. mt., Category B, year of construction: 1985. Calculate the property tax.
Answer: Category B Unit Value of the area = 500 INR per sq. mt.
Unit area: 100 sq. mt.
Age factor: 0.6
Use factor: 1
Structure factor: 1.0
Occupancy factor: 1.0
Annual Value = 500 * 100 * 0.6 * 1.0 * 1.0 * 1.0 = 30000 INR
Property tax = Annual value * Tax Rate = 30000 * 12% = 3600 INR
Therefore, property tax calculated is 3600 INR.
For a senior citizen, women, ex-servicemen, physically disabled; there is a 30% rebate which makes the property tax 2520 INR
Paying Online Property Tax:
Property owners can pay their property taxes by using the following steps:
1. Go to http://www.MCDpropertytax.in
2. Login using your credentials such as property ID and follow the given instructions
3. In case you do not have a property ID, you can always calculate property tax for your property with the help of the System of Unit Area formula.
Tax Rebates you can get by Paying Property tax
There are many benefits associated with paying one’s property tax. Here are some of the interesting benefits one can easily avail:
1. For women, senior citizens, ex-serviceman and physically disabled individuals, there is a 30 % rebate on property tax as per the MCD.
2. This rebate is applicable only if there are complete self-occupancy and total usage of the residential property.
3. The 30% tax rebate is valid on properties that cover up to two hundred square meters. In case, one owns a property bigger than two hundred square meters, the rebate percentage should be calculated using the formula:
Annual property tax * 0.3 divided by total cover area.
4. As for smaller apartments, the owners will get a surpass tax rebate.
5. For cooperative groups of housing societies or DDA (approximately 100 sq. mt.), the property tax rebate is 10%.
6. If the owner of a group of residential flats pay their taxes before the end of the financial year (before 30th June), they will get a rebate of 20%
Reasons to Pay the MCD Property Tax:
● If a property owner pays their entire taxable amount in one EMI before 30th June of a financial year, they are eligible to get 15% tax rebate on their property tax.
● One has to pay their property tax along with the interest (quantifying to the time passed) within 31st March.
● If the property owner fails to pay their taxes after 31st March, they will have to pay with a penalty and the interest rate will be imposed on the property tax.
Property Taxes Of Different MCD Zones
South Delhi Municipal Corporation Property tax: South Delhi MCD provides options for offline and online payment of property taxes along with tax return filings. Offline payments make it easy for many individuals who are not familiar with online technical procedures. There are 5 zones for paying property taxes: south, west, central, Headquarters and Najafgarh.
North Delhi Municipal Corporation Property tax: North Delhi MDC is segmented into 7 different zones namely: Headquarters, SP Zone, Rohini, Keshavpuram, Narela, Civil Lines and Karol Bagh. North Delhi property owners can also use both offline and online modes to file their taxes along with tax returns filings for the current and previous financial year.