Jagmohan Garg, MD of Mera Baba Group, explains what is property tax and on what basis it is calculated
Property tax is a recurring charge that leaves most home owners baffled, since the tax amount varies from one location to another. However, renowned realtor Jagmohan Garg is of the opinion that once you understand the basics, property tax becomes much easier to reckon.
“The owners of residential properties are liable to pay property tax to their respective municipal bodies every year, based on the area/colony in which the property is located. Based on the values of properties in various localities, big cities like Delhi are divided into eight categories from A to H. The rate of property tax and the unit area value (assigned value per sq metre of the property) differ for all the eight categories,” explained Jagmohan Garg.
On being asked about how property tax is calculated for a residential property in Delhi, Mr Garg elucidated, “The Municipal Corporation of Delhi (MCD) uses the ‘Unit Area System’ to calculate property tax. According to this system, the amount of property tax is determined by multiplying the annual value of the property with the rate of tax.”
Jagmohan Garg added, “The MCD also offers rebates on some property tax payments, which are subject to fulfillment of certain conditions. A tax payer is eligible to receive a rebate of 15 per cent on total tax amount, if the property tax is paid as a lump sum in a single installment during the first quarter of the year.”
Tax payers owning DDA and CGHS flats up to 100 sq meters also receive a rebate amounting to 10 per cent of the annual value. In a similar fashion, a rebate of 30 per cent is given to senior citizens, women and the physically challenged, only on one property.
After explaining the calculation and rebate eligibility for property tax in Delhi, Jagmohan Garg moved on to explaining the various payment modes through which property tax could be paid in Delhi. “Online payments are the most convenient way to pay property tax. The portal for online payment is available on MCD’s website, where payments can be made using internet banking, debit or credit card,” he said.
In a bid to encourage more online property tax payments, MCD has made significant investments since last year to make its website user-friendly, more efficient and technologically advanced. A fine of 1 per cent per month is levied upon the unpaid amount in case of delayed payment of property tax.
“After making property tax payment online, one must ensure that the system updates his record and no outstanding amounts are shown against his account. If there are any errors, make sure to get them corrected as soon as possible,” suggested Jagmohan Garg.