Preeti Sharma

Property tax, the levy on property imposed by the municipal corporation is payable every year. Though it is taken seriously by most of home owners, but not by all. Some of us may have not paid it for several years, while some are ignorant enough to miss the deadline of payment every year. Have you wondered why it is important to pay your property tax? Magicbricks’s got the answer for you.

Praveen Kumar Gupta, commissioner, North Municipal Corporation Development (MCD) featured on Magicbricks’ chat platform GuruTalk, a part of Magicbricks’ Advisory Marathon and explained that in order to get good services from the municipal corporation, it is very important to pay your property tax and that too on time.

On being asked by a user, Gargi Sen, that if the corporation is facing difficulty in collecting taxes on time, Gupta replied, “Yes we do. We follow the method of voluntarily filing returns for taxes. However, on examination, it is found that only 30 per cent properties are covered under the tax net. Those assessed are also under evaluated and even among them, some property owners are not paying taxes on time and wait for the amnesty schemes (exemption schemes).”

“To overcome these problems, North MCD is conducting house to house survey for all the properties through a private agency and also verifying spatial data. After the survey, it is expected that our property tax collection will double in the least,” he added.

How to calculate property tax for residential or commercial property?

In reply to Magicbricks user, Swadesh Dhiman, asking about the calculation method, Gupta said, “After 2004, property tax is calculated based on the unit area method. The value of the property in a particular area is calculated based on the circle rates of the land and the construction layout of a particular property in the locality.”

How to calculate property tax on land?

Not many property owners are aware that if they own a piece of land that comes under the purview of the municipal corporation to pay property tax. It does not matter if the land is lying vacant and unused. In reply to such a query from Janmeet Singh, Gupta said, “As per MCD Act, property tax is chargeable even on the vacant/open land, if the constructed area is less than 25 per cent of the total plot area.

The charges for the vacant land over and above area is charged at the rate of 30 per cent of the property rate of built up area. For example, if the area is 2000 sq m and the built-up area is 200 sq m, then the property tax for the 1200 sq m shall be charged as vacant land tax.

Concession for women as primary home owners

In Delhi, women property owners (primary) get concession of 2 per cent vis-a-vis the normal stamp duty which is 8 per cent. “There is a rebate for women on property tax. If the plot is up to 200 sq m, the rebate for the women property owners will be 30 per cent. There will be no property tax rebate on the plots bigger than that,” Gupta said.

Property tax delay fine and penalty

“In case of delay, you have to pay the interest of 12 per cent per annum on the tax amount and penalty of 15 percent for residential and 30 per cent for commercial on the total amount of the tax,” Gupta said.

How to pay property tax

The Municipal Commission offers several options to the property owners to pay their tax, such as by demand draft, by cheque, by credit card (online payment), net banking, and through cash as well at the zonal collection points.

Other key takeaways of the GuruTalk session

MCD is trying its best to clear garbage regularly. There is a need for cooperation from the public

For residential property, stamp duty is calculated as per circle rate fixed by authorities. For commercial property, it is double

The construction of high rise buildings in Delhi depends upon the Government of India policies

Expect smart electricity, WiFi facility, smart parking system, mechanical road sweeping from the Smart City plan of NDMC

MCD is facing acute shortage of funds and is not able discharge its mandatory and other development functions

North MCD is planning to replace street lights with LEDs and also to build public toilets