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Property Tax

What is Property Tax?
Property tax or house tax is a local tax levied by municipal authorities for maintaining basic civic amenities in your area. This tax is to be paid for upkeep of civic facilities like roads, sewage system, lighting. This is paid by the Owners of the property either annually or semi-annually. Property tax differs across states, cities and even within zones of the same city. Property Tax is the principal source of revenue in urban local bodies in virtually every part of the world.

In Delhi, the property tax is calculated on the basis of Annual value method. Tax is payable to one of the three municipal corporations in Delhi, North Delhi Municipal Corporation or North MCD, South Delhi Municipal Corporation or South MCD and East Delhi Municipal Corporation or East MCD.

The city of Delhi is divided into eight categories from A to H based on the value of the property and Rate of Tax for which is as Below -:

Property Rate Tax Category Wise

Calculation  for Payment of Property Tax

Property Tax is  calculated as product of Eight  factors as given below and we will explain each component briefly.

Total Tax = Unit area value per sq mtr * unit area of property * age factor * use factor * structure factor * occupancy factor * Rate of Tax

Unit Area Value – This is the assigned value per square of meter built-up area of the property  based on category

Age Factor – This factor tales into account the age of the building and provides for higher tax on newer properties and lesser tax on older properties in line with the market value. On the basis of age of the building, this factor ranges from 0.5 to 1.0 with changing span of 0.1 across 10 years gap.

Use Factor – This factor takes into account the usage of the property and provides for lower tax on residential use properties and higher tax on and non-residential ones or Commercial Properties.

Structure Factor – This factor provides for higher tax rate on RCC constructions and provides lower property tax rate on lower value constructions some which are graded below:

Occupancy Factor – MCD or any other  Municipal corporation  charges higher property tax on rented out properties while charging lower tax on self occupied ones.

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