In Mumbai, property tax is based on a number of factors including construction, age, area, and location. The Brihanmumbai Municipal Corporation (BMC) is in charge of collecting property tax. The BMC has an online facility for tax payments.
Property tax refers to the annual amount paid by a property owner to the local government or the municipal corporation of his/her area. Property tax is a kind of direct tax levied directly on properties such as real estate property, shop, house, office building, rented properties and land.
BMC Property Tax
Property tax is charged in Mumbai based on the construction of a property, its location, age of construction and carpet area. The Brihanmumbai Municipal Corporation (BMC) receives nearly Rs. 3,000 crore as profits by collecting property tax from its residents. Earlier, built up area of a property was considered as one of the key component of measuring property value in Mumbai. But, recently, the Brihanmumbai Municipal Corporation revised the parameter of calculating property tax and includes carpet area as one of the key components of calculating your property tax. This new initiative taken the Brihanmumbai Municipal Corporation is expected to increase the property tax collection in Mumbai by 14.5% in 2015-16 form it previous estimation of 27%. This new rule will remain effective for the coming next five years with effect from 1st April, 2015. As per the new tax rules, there will be a 40% increase in property tax rates in Mumbai, both on residential properties having less than 500 square feet and constructed before 31st March, 2015 as well as on commercial properties.
Property Tax in India
In India, property tax in India is collected by the local municipal authority. The municipal corporation of a particular area imposes property tax on the property owner by assessing the total value of his/her property. Property tax collected in India is used for maintaining and supporting basic civic services such as construction of schools and libraries, repairing roads, improving sanitation, emergency services, transportation, parks and various other recreational activities. The municipal corporation can collect this tax either annually or semi-annually from property owners. Property tax in India is assessed and collected based on factors such as the area of a property, its size, location, construction details etc. However, vacant properties and central government properties are exempted from paying property tax in India.
How to Pay Property Tax Online in Mumbai?
Property tax payment has been made very simple by the Brihanmumbai Municipal Corporation (BMC) in Mumbai. The corporation is even planning to facilitate property tax payments via the mobile application developed by the Municipal Corporation of Greater Mumbai (MCGM). The mobile app called MCGM 24X7 is expected to go live in September, 2015 when property owners will be will be able to clear their property tax dues from anywhere across the world.
However, you can also pay your property tax bills online by visiting the official website of Municipal Corporation of Greater Mumbai. On the webpage, you need to click on the button called “Property Tax New” which will redirect you the “Citizen Portal Services” wherein you can log in by putting your property account number and pay off your property tax online.
MCGM Property Tax Bill
Property tax bill will be sent you by the municipal corporation after assessing the value of your property. In case of Mumbai, the Brihanmumbai Municipal Corporation sends the property tax bills to individual consumers stating the amount of property tax to be paid. The property tax bill usually contains the full cash value, assessed value and taxable value of your property.
Property Tax Calculation in Mumbai
Property tax calculation in Mumbai is done based on the annual value of your property. The annual value differs from properties and there may be different annual values for self-occupied and let out properties. If it is a let out property, the annual value will be equal to the maximum of municipal valuation, or rent received, or fair rent as decided by the Income Tax department of India. In case of a self-occupied property, the annual value is considered as zero, provided the property is used for stay by the owner or it is laying vacant. However, if the owner let the property on rent for a year or few months, the annual value will be calculated respectively.
In Mumbai, you can calculate your property tax online by visiting the official web site of Municipal Corporation of Greater Mumbai. Once you click on the “Property Tax (New)”box, it will redirect you to the calculator which will help you calculate your property tax instantly. What you have to do is to put the following information in the calculator – ward no, zone, sub-zone , occupancy type (self-occupied/ tenements), user main category (commercial, land, residential and industrial ), date of effect, user sub-category, floor, floor sub-type (mezzanine, loft and attic ), year of construction, nature and type of building (luxurious, kuccha structure etc.), age of building, tax code, floor space index (FSI) and whether water connection available or not. Once you put all the above – mentioned details, the calculator will immediately reveal the amount you need to pay as property tax in Mumbai.
MCGM Property Tax Rates
Interest is charged on property tax, if the property tax remains unpaid or pending for a given period of time. This is a kind of penalty fees charged on late payment of property tax. Recently, many states in India have waived the interest amounts charged on pending property taxes. For example, Haryana chief minister Manohar Lal Khattar declared a one-time waiver of interest on property taxes pending since 2010.
Property Tax under 80C
Under section 80C of the Indian Income Tax Act, you can get tax deduction for investing in residential properties. You become eligible for tax deduction on the payments made towards purchasing or constructing a new residential property in the previous year. The following categories of payment qualify for such deductions - any instalment or part payment of the amount repayment of the amount, stamp duty, registration fees and other expenses incurred in transferring the property to the assessee. The maximum deduction you can receive is Rs. 1.50 lakh p.a.
Capital Gains Tax on Property
CGT or capital gains tax is a kind of tax that you need pay when you sell your property. Capital gains tax is charged on the profit you earn from selling your property. Gains or profits derived from selling capital assets such as bonds, shares, mutual fund units, and property are taxable under the Indian Income Tax Act, 1961. The profit you earn by selling your capital asset is called Capital Gains.