Delhi Property Tax
Delhi Property Tax
Property tax is a vital source of revenue for any state government. Property tax is levied on the owners of properties and the fund collected under the same is used for developing various civic amenities such as laying roads; improving sanitation and hygiene in public places; etc. It is administered by the state governments and is entrusted to various municipalities within the state. In this article, we look at the Delhi property tax in detail.
Municipal Corporation of Delhi (MCD)
The citizens of Delhi are accountable to pay property tax every year to the Delhi Municipality body, known as the Municipal Corporation of Delhi. It has been reported that many developing countries have failed to fully collect property tax due to inadequate information, unproductive management, and inconvenient payment procedures. To put an end to this, MCD provides transparent, accountable and efficient citizen-centric services to its citizens using the latest Information Technology. The Property tax division of MCD has come up with an innovative, broad-based approach of Public-Private Partnership.
Methodology of Taxation
MCD charges taxes for all buildings including vacant lands. On a general note, there are three taxation methods- Annual Rental Value, Capital Value System, and Unit Area System for computation of property tax. MCD has chosen to abide by the Unit Area System to evaluate the tax amounts that have to be remitted by its citizens. This particular taxation method comprises the built-up area, period and structure of the building, the location of a property and its purpose.
Unit Area System is a simple arithmetic system that is used to calculate the annual value of a property based on the area covered by the building or the vacant land by the unit rate where the building or the vacant land is situated. The total property tax in Delhi is the tax rate multiplied with the value of the property. The Delhi Government has appointed a Municipal Valuation Committee in determining the category of the colonies, the unit rate of each colony and the multiplication factors. If a building is used for multiple purposes or if the building has been constructed in stages, the annual value has to be computed for every portion separately.
Property Tax Computation
Property tax is calculated based on the formula given below:
Property tax = Annual Value * Rate of tax
The annual value of a property can be calculated by using the formula that is mentioned below.
Annual Value = Unit area value per sq metre * covered area of property * Age factor * Use factor * Structure factor * Occupancy factor * Flat factor
Unit Area value per sq metre is the value per square metre of the constructed area of the property based on the category it belongs to.
The covered area of the property is the total floor area that includes the width of the walls, verandah and courtyard, gangway, garage, common areas, staircase and balcony including any projected area beyond the boundaries of the plot.
The age factor ranges between 0.5 to 1 depending on the age of the property.
Use factor is assigned by the MCD, based on the usage of the property.
Structure factor is determined based on the construction of the building.
Occupancy factor is determined based on the person who occupies the property (owner or tenants).
The annual value for vacant land is calculated based on the following formula:
Annual Value for Vacant Land = Unit area value per sq metre * area of vacant land * Use factor * Occupancy factor * 0.3
Due Date and Penalty
If the property tax is paid in full before the first quarter, then the taxpayer avails a refund of 15% on the total sum. If there is a delay in the property tax payment, a penal interest of 1% is applicable for every month of delay.
A taxpayer can pay property tax to MCD in two methods: Online and Offline Procedure.
Given below are the steps to remit the tax online:
Step 1: Log on to the website
The taxpayer has to log on to the official website.
Step 2: Choose the Appropriate MCD
The taxpaying applicant has to click on the appropriate MCD from the given options.
Step 3: Agree with the terms and conditions
Now, he/she must tick the box stating the agreement of the terms and conditions and then select ‘Click here to file property tax’.
Step 4: Enter the Property ID
The applicant has to enter the property ID for the tax that has been paid for the previous year and then click on the ‘Submit’ option. Taxpayers who do not possess a property ID has to select ‘Click here to file your return if property ID has not been allotted earlier’.
Step 5: Property Ownership Details
The user will be directed to a new page containing the property ownership details.
Step 6: Enter the Property Details
All the details of the property must be entered, and then submitted.
Step 7: Tax Payment
Once the details are submitted, the taxpayer can pay the required amount using credit/debit card or through net banking.
Step 8: Generate Challan
The taxpayer has to click on ‘Generate Challan.’ The official challan will be displayed on the screen.
Besides calculating late fees and interest amounts. the online portal provides details regarding the property tax arrears and penalties.
A taxpayer can alternatively pay tax offline by approaching any ITZ cash counters in Delhi. Once the payment is completed, the applicant receives a receipt that contains the property tax ID.
Exemption and Concession
Exemption and concession for property tax can vary depending on where the property is located (North, South or East MCD).
- Buildings or vacant lands that are occupied and used for public worship, public burial or cremation grounds, heritage lands or buildings that are occupied and used by any society or body for charitable purposes.
- Agricultural lands and buildings other than dwelling houses.
- Properties that are owned by war widows or Gallantry Award winners.
- Property martyred on police/paramilitary duty.
- Property owned by a handicap on duty in the South MCD.
- Properties owned by winning in international games.
- A concession of 30% is applicable to Senior citizens, women and physically challenged people.
- A refund of 30% for ex-servicemen.
- A refund of 20% for group housing flats till 30th June of a financial year.
- A refund of 10% to DDA/ CGHS residences up to 100 square metres of the constructed area of a building.
The following conditions have to be satisfied in order to attain concession.
- Refund is applicable for areas that have a maximum area of 200 square metres of the constructed area. DDA and CGHS residences have various other limitations.
- The usage of the residence must be for self-occupation.
- In case of multiple owners, the refund is applicable to the property share of owners who are under the refund category.