Generally, property tax in India is calculated in three different ways.
Annual Rental Value (ARV) - In this process, the gross annual rental value of the taxable property is determined by the Government/Municipality. Cities like Delhi, Chennai, etc., follow this system to calculate tax.
However, first, you need to estimate the yearly property value. For example, residents of Chennai follow the below-mentioned formula.
Rental Value (Monthly) = Plinth Area* Basic Rate per sq ft.
Rental Value (Annual) = Monthly rental value*12- 10%
Capital Value System (CVS) - In this system, the property tax depends on the current property value, which the local Stamp Duty Department fixes. Mumbai follows the formula below to determine the property tax payable.
Following is the property tax calculation formula that is used to estimate the amount payable.
Property tax= base value* property type* age factor*built-up area*floor factor*usage category.
Determine the property value from a particular zone and multiply it with the carpet area of the property.
Unit Area System (UAS) - Here, the property tax depends on the expected return from a property. The cities like New Delhi, Kolkata, Bangalore, etc., follow this system. Following is the process to arrive at the annual value of a property.
Annual Value- Unit Area Value* Carpet Area Value*Use Factor*Age Factor*Occupancy Factor*Structure Factor
Besides, other factors also play a part in determining your property tax bill. The following are some of these -
- The taxing agency
- Property type
- Difference of civic operation of different regions
- The locality of the property, occupancy status like let out or self-occupied, etc.
You can easily get hold of an online property tax calculator that can compute your property tax in a matter of seconds.
Such calculation eventually aids in property tax online payment. However, taxpayers also need to understand the exact procedure for clearing these taxes.