Under Indian Taxation Law, individuals who own property – residential or commercial, are expected to pay property tax within a fortnight of the commencement of the half-year. The manner of payment differs from city to city, and is determined by the respective States.
- Property tax in Chennai comes under the jurisdiction of the Chennai Municipal Corporation. As a first step, the prospective home buyer has to apply for assessing value of the property and to evaluate property tax. The application is raised by using a form available with the Office of the Revenue Officer, Office of the Assistant Revenue Officer or the Officer of the Zonal Offices. The application must be accompanied with copies of the title deed, the approved plan, receipt of tax last paid and where a lease exists, a no objection certificate from the landowner. Following this, the evaluation takes place.
- According to the Chennai City Municipal Corporation Act of 1919, the Reasonable Letting Value (RLV) or the Annual Rental Value is calculated. This helps determine amount payable as half-yearly property tax. The monthly rental value of the property is based on the basic rate per sq. ft. The amount arrived is then multiplied by 10.92 which is the annual value of the property. The half yearly property tax is 12.40% of this amount. Evaluation of property tax is also determined by the type of building. The Formula: Half yearly property tax = Plinth Area x Basic rate x 10.92 x 12.40%
- Some concessions are provided on property tax. These include a 20% rebate on monthly rental value for semi-permanent buildings such as tiled, asbestos or thatched buildings; a 25% rebate on monthly rental value for residential buildings occupied by owners; and a 10% rebate on monthly rental value for non-residential buildings occupied by owners. A maximum of 25% rebate is allowed on buildings older than 4 years (1% for each year).
- Payments can be made online through the Chennai Corporation website, or offline at one of the walk-in counters set up at select banks. Tax collection through offline medium is done by the Electronic Clearing Scheme (ECS) and is semi-online in nature.
Calculating property taxes, deciding on hiring property lawyers who can help understand the nuances and property valuation – all these require a lot of tightrope walking. RoofandFloor aims to make your home buying journey easier.