As per this rule, property owners of Delhi are liable to pay property tax to the Municipal Corporation of Delhi (MCD). However, while paying property tax in Delhi, they must keep certain crucial pointers in mind.
Read on to know about these in detail.
Property tax is collected from property owners for the maintenance and upkeep of local and civic authorities. It is one of the prime sources of revenue for local municipal authorities or urban government bodies upon whom the responsibility of tax collection is delegated.
Note: Delhi is segmented into eight categories from A to H on the basis of property values in the colonies in each category. The tax rate in Delhi ranges from Rs.100 (for H category) to Rs.360 (for A category). Additionally, the tax rate varies in Delhi as there are three municipal corporations –east, south, and north.
Formula for calculating property tax in Delhi
Currently, there are three methods of calculating property tax in India, namely, Capital Value System, Unit Area System and Annual Rental Value. Out of these three methods, the Municipal Corporation of Delhi (MCD) selected the Unit Area System for computing property tax in Delhi. The formula used for calculating property tax (also known as municipal tax or house tax) is as follows,
| Property tax = Annual value x Rate of tax |
Where,
| Annual value = Unit area value x Unit area of property x Age factor x Structure factor x Use factor x Occupancy factor. |
Here,
- Unit area value per sq. metre refers to the value per sq. metre of the built-up area of the property.
- Unit area of the property is the total built-up area (excluding carpet area of the property) in sq. metre.
- Age factor ranges from 0.5 to 1.0. New properties are levied with higher taxes compared to older ones.
- Use factor refers to the usage of property (here, residential or non-residential). Non-residential properties are taxed higher than residential properties.
- The structure factor depends on the construction. The authority levies higher taxes for RCC (Reinforced cement concrete) construction than low-value construction.
- Occupancy factor determines the high tax amount for rented properties and the lower tax amount for self-occupied ones.
And, Rate of tax = Rate set by the MCD for all categories ranging from A to H.
Due date and penalty charges
The due date of paying property tax in Delhi is 30th June every year. In case Delhi property owners delay paying tax, they have to bear a penal interest at 1% per month until the complete payment. By paying property tax on time and maintaining the related documents, individuals of Delhi can easily apply for different credit facilities, including a loan against property.
There are different types of loan against property that helps individuals to cover a wide range of expenses.
On the other hand, if individuals have taken multiple loans from several borrowers, they can take the help of loans against property in consolidating existing debts. Notable lending institutions offer high-value loans on a property at a lower loan against property interest rates and extended repayment tenor.
These lending institutions further provide pre-approved offers to streamline the loan availing process simple. These offers are also available on other financial products such as home loans and loans against property. Borrowers can check their pre-approved offers by providing basic details such as names and contact numbers.
Rebate on property tax in Delhi
The Municipal Corporation of Delhi (MCD) offers a rebate on property tax in Delhi. If individuals pay property tax in Delhi in a lump sum within the due date, they will receive a rebate of 15% on the entire tax amount.
Payment methods
Online process
- Visit the official website of MCD and select the corresponding area.
- Select ‘Online Filing of Property Tax Returns’ and next select ‘Click Here to File Property Tax’.
- Enter Property ID and other property-related details and details regarding previous arrears (if any).
- Click on ‘Submit’.
Offline process
Individuals can physically pay property tax in Delhi at any ITZ cash counter and collect instant receipts.
Equipped with the knowledge of essential pointers of property tax in Delhi, individuals can pay the same without any hassle.
