Mumbai property owners are in for some much-needed relief with the BMC (Brihanmumbai Municipal Corporation) declaring its waiver of 100% for property taxes imposed on those units measuring up to 500 sq ft in carpet area. This announcement is a part of the 2022-23 budget by the BMC and will benefit 16 lakh+ homeowners in Mumbai.
CBO & Principal Partner-Asset Management Services & Data Intelligence, Square Yards, Anand Moorthy, stated that property taxes vary throughout India and they differ on the basis of several parameters like the type of property, assessed value, location, age and access roads among others. He added that the Capital Value System is followed by the BMC where the tax calculation takes place on the property’s market value in residential, retail, commercial, warehouse, and other categories. Hyderabad and Chennai municipalities adhere to the Annual Rental Value System where tax calculation is done on the yearly rental value of a property. The tax will depend on proximity to major landmarks and cosmopolitan centres along with location and amenities available in the same.
The Unit Area Value System is another calculation method where taxes are imposed on the per unit value of area. The per square foot per month calculation unit is used for this purpose. This valuation system is followed in Bangalore, Delhi, Patna, Ahmedabad and even some corporations of Hyderabad. Moorthy stated that certain citizen categories like physically challenged women, senior citizens, group housing apartment owners, apartment owners in the Central Government Health Scheme and ex-servicemen, who get up to 30% in rebates according to Moorthy.
He also stated that in most Indian States, property taxes are due on the half-yearly or quarterly basis. Some governments, however, such as the Haryana and Delhi Governments, offer some rebates for taxpayers in case they pay the entire amount in a lump sum for that particular assessment year. Moorthy also added that property taxes may be paid either online or offline. For the latter, taxpayers may fill up requisite forms with all details like the property classification, dimensions, location and then pay the necessary amount by submitting a demand draft or cheque.
Or else, taxpayers may pay online through the portals of their respective corporations, filling up all the necessary details. They can pay their tax amounts through debit/credit cards or NEFT according to Moorthy. He also stated that most municipal corporations do not have rigid procedures for collecting taxes and there are often scenarios where home owners have dues going back by several years. Yet, when dues start piling up, the authorities issue notices while taking measures to collect these pending amounts from all defaulters. He added that failing to pay taxes on time will lead to high penalties from the corporation and even auction notices in extreme cases. Penal interest is payable on the amount due, depending on the state.
The corporation may take other measures to recover pending dues if defaulters cannot pay their outstanding dues within the stipulated duration. They may obtain warrants of distress and sale of movable properties or even for the attachment and sale of the immovable properties of defaulters. If a warrant is issued, defaulters cannot transfer/sell their properties. Municipal authorities can initiate recovery suits in courts if they fail to recover their dues totally through these warrants. Moorthy also added that no one can escape property tax payments, especially if they are planning to sell their properties in the future. Not paying property taxes becomes a big issue while selling any property since buyers will always require full clearance proof of earlier tax payments before the transaction is finalized. Hence, paying property taxes in a timely manner is always a good habit according to him.
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Published Date: Feb 07, 2022
