Chennai Property Tax
Chennai Property Tax
The Greater Chennai Corporation is one of the oldest public institutions in India established on the 29th of September, 1688. The Parliamentary Act of 1792 gives this Corporation the power to levy municipal taxes on the properties within the city. This municipality is entrusted with the regulation, management and collection of property tax in Chennai. Property tax is levied on every building and vacant lands unless exclusively exempted. This article is a guide to paying property taxes in Chennai.
Overview
Property tax is a recurring charge that has to be paid by homeowners annually. However, the tax amount for property varies from one location to another. Owners of residential properties are liable to pay property tax to the Greater Chennai Corporation every year. The municipality uses these funds collected as property tax to provide critical civic facilities and services. In Chennai, paying property taxes is a simple and hassle-free process. The online portal offers the taxpayers of Chennai with the facility to calculate their pending taxes to be paid and enables them to make the necessary payments online. The Chennai municipal corporation is divided into 15 zones.
As per the regulation, the Greater Chennai Corporation adopts Reasonable Letting Value (RLV) to estimate an Annual Rental Value (ARV). Then, this is used to calculate the half-yearly tax for any property that is situated within Chennai’s prescribed corporation limits. The Greater Chennai Corporation considers the following factors while assessing property taxes:
- Plinth area
- Basic rate of the street in which the property is situated.
- Usage of the building (residential or non-residential).
- Nature of occupancy (owner or tenant).
- Age of the building
Tax Calculation
The calculation for Chennai property tax is done by taking into consideration.
| Plinth Area x Basic Rate per Sq. Ft. (assuming that Plinth Area=100 Sq. Ft. and Basic Rate per Sq. Ft.= INR 1.00) | Monthly Rental Value = INR 100 per month |
| Annual Rental Value = INR 100 x (12 months) – 10% for Land. Annual value just for the building. | INR 1,200 – INR 120 = INR 1,080 |
| 10% depreciation for the building including repairs and maintenance | Rs.108 (10% of INR 1,080) |
| Depreciated Value of the building | INR 1,080 – INR 108 = INR 972 |
| 10% for the value of the land | INR 120 (10% of INR 1,200) |
| Annual Value for the land and building | INR 972 + INR 120 = INR 1,092 |
In simpler words, 10.92 is a common factor when Annual Value for a building is calculated. To find the Annual Value of a building, simply multiply the 10.92 with the Monthly Rental Value of the building.
The following table indicates the half-yearly property tax for any property.
| Annual Value | Half year tax (as a percentage of Annual Value) | |||
|---|---|---|---|---|
| General Tax | Education Tax | Total | Library Cess | |
| INR 1.00 to INR 500 | 3.75% | 2.50% | 6.25% | 0.37% |
| INR 501 to INR 1,000 | 6.75% | 2.50% | 9.25% | 0.67% |
| INR 1,001 to INR 5,000 | 7.75% | 2.50% | 10.25% | 0.77% |
| INR 5,001 and above | 9.00% | 2.50% | 11.50% | 0.90% |
NOTE:
- 20% rebate over the Monthly Rental Value is offered for semi-permanent buildings that are tiled, thatched, and so on. The only exception is for buildings with terrace roofing.
- 10% Library Cess is calculated as 10% of the General Tax of the Property Tax.
- 25% rebate over the Monthly Rental Value is offered for owner-occupied residential buildings.
- 1% depreciation is also offered annually for buildings more than 4 years old. The maximum rebate offered under this situation is 25%.
- 10% rebate over the Monthly Rental Value is offered for owner-occupied commercial properties.
Online Payment Process
The Greater Corporation of Chennai has created a fast, secure, transparent and an efficient way for you to pay your property taxes online with ease. The following is the online process to pay property tax in the city of Chennai.
Step 1: Visit the official website of the Greater Chennai Corporation.
Step 2: On your left, there would be quick-links to guide you through the Greater Chennai Corporation website. Click on the tab that says Online Civic Services.
Step 3: On the next page, click on the option of Property Tax and proceed to the next page.
Step 4: From the various option with respect to Property Tax in Chennai, click on the option that indicates Property Tax Online Payment.
Step 5: On the next page, enter information such as Zone Number, Ward Number, Bill Number and Sub Number in their respective fields. These variables can also be found on the invoices you have received for paying property tax for the same property in the past.
Step 6: Click on the Submit icon. By doing so, you will be taken to the page where your outstanding payable amount is indicated in the second section.
Step 7: Select the period for which you want to pay the taxes, and click on the Pay Online tab.
Step8: Select the amount you wish to pay, Select your preferred payment method and click on the Submit icon.
Step 9: You will receive an SMS notification indicating that your payment has been successfully cleared.
Due Dates and Penalty
The due date for the payment of property taxes in the city of Chennai is the 31st of March and the 31st of September, every year.
The penalty for delayed payment of property taxes is 1% of the total tax amount to be paid. This would increase by 1% for every month past the due date.
Exemptions and Concessions
The Corporation of Greater Chennai is the municipality body that deals with the regulation and the collection of property tax in the city of Chennai. Property Tax is laid on every building, regardless of being vacant lands and buildings, unless specifically exempted from paying taxes. Most properties owned by the Central Government and premises occupied by any foreign mission, such as an embassy, are exempted from paying any taxes. However, as of 2018, the exemptions that previously existed for private education institutions were taken down.
In terms of concessions, the following are permitted with respect to property tax in Chennai.
- 20% rebate on the monthly Reasonable Letting Value for semi-permanent buildings.
- 25% rebate on the monthly Reasonable Letting Value for owner-occupied residential buildings.
- 10% rebate on the monthly Reasonable Letting Value for owner-occupied commercial portions of the building.
- 1% depreciation is also offered annually for buildings more than 4 years old. The maximum rebate offered under this situation is 25%.
