Tax paying season is always with tension. But with the right research and guidance, paying taxes need not be a hassle at all. We asked our legal expert for a guide to paying property taxes in Mumbai.
What’s property tax?
A property tax is levied on all owners of property by the local municipal bodies for funding services such as maintenance of local roads, cleanliness, drainage, and other civic facilities.
This annual or half-annual tax is payable to the Brihanmumbai Municipal Corporation (BMC) for owning all residential properties in Mumbai. An exemption has been granted to houses in the city, which have a carpet area of up to 500 sq. ft.
For other properties, the Capital Value System (CVS) is used to calculate the tax payable. The system that existed earlier was known as the Rateable Value System (RVS), which calculated the tax based on the capacity of maximum rent of the property. The CVS, on the other hand, calculates the tax based on the market value of the property.
Where can I get help?
The BMC Citizen Portal website allows for tracking of all details and payments made on the property. It allows for tax payment via net banking.
Every registered property has a ‘CVS Login Account’ on the Citizen Services Portal, on which taxes are to be duly paid. The Portal allows a login based on the Property Account Number, which can also be found by using the ‘Property Account Number Search’ feature.
The Portal also provides a tax calculator, which can be used to calculate payable taxes on any property as a hypothetical example. The account keeps a log of outstanding dues if any and also records any payments made offline.
How can I calculate the capital value of a property?
The capital value of the property is determined based on the market value of the property, total carpet area, the construction type (such as bungalows, under-construction or vacant land), and age of the building. Certain units of ‘weight’ are allotted to varying types of construction and the age of buildings.
To calculate the market value of the property with ease, the State Government has prepared a year-wise Ready Reckoner for all districts of Maharashtra, which is a compilation of fair value prices in various wards or zones. The capital value of the property is determined by the product of all these factors.
How can I determine the total tax payable?
Similar to the calculation of units for different types of construction, units of ‘weights’ have been assigned to properties of different ‘user categories’, such as hotels, commercial properties or residential properties. ‘1 unit’ of weight is attached to a residential institution.
The capital value of the property, when multiplied by the current property rate and weight for the user category, will show the total property tax payable on the specific property.
Payment of the tax
The property tax may be paid online or offline.
Online: The BMC Citizen Services Portal provides an extremely efficient record as well online payment system of taxes via net banking.
Offline: If the tax is to be paid offline, the due amount may be paid at the BMC Help Centers, the Office of the Assistant Revenue Officer or at the Citizen Facilitation Centers set up inwards. A receipt or online receipt is issued upon payment. This property tax receipt provides for a document of proof of ownership during any disputes over the property. The receipt is also a key document to avail loans against property or for its registration.
In the month of May 2017, the BMC introduced the ‘early bird scheme’ which gives a concession of 2% or 4% for the payment of the first or second installment respectively, before the 30th of June. This rebate has been made available only to those who have no outstanding dues against the property. So, go ahead and pay your property taxes now!
This article was originally published on www.thehindu.com
