Taxes are the most important source of revenue for the Government. One amongst them is Property Tax. Property Tax is imposed and collected from the owner of the property. The State Government levies property tax and distributed to various municipalities for the betterment and maintenance of several localities of the state. Every state has different rules and regulations considering the property tax which will be further utilised for the maintenance of local roads, drainages, public parks, etc.
Property here refers to all the tangible real estate properties concerning the ownership held by any individual. Property includes houses and its premises, office buildings and houses let out on rent for the third parties.
Types of Property:
In India, properties are classified into four types. Based on that taxes are estimated by the Government and charged to individuals.
However, property tax in India is to be paid on ‘real property’ which includes land and improvements on land on which government estimates the monetary value of such property and tax is assessed accordingly. Municipality of particular area takes the responsibility of assessment and determines the value of the property tax. Property tax can be either paid on annual basis or semi-annual basis. The tax rates differ from municipality to municipality.
Likewise, Greater Hyderabad Municipal Corporation (GHMC) is the municipality that takes care of taxes and maintenance of Hyderabad.
Individuals owning property in Hyderabad are liable to pay property tax to the municipality of Hyderabad, i.e. GHMC. GHMC is a municipal body that is entitled to levy taxes to the individuals. GHMC utilises these funds to facilitate better services to the citizens of Hyderabad.
GHMC has set its slab rates for the calculation of property tax. GHMC uses the annual rental value as the basis for collecting property tax in Hyderabad.
GHMC provides online and offline services for the payment of property tax. On the website of GHMC, it provides property tax calculator to ascertain the approximate value of tax.
Property tax is calculated differently for residential and commercial properties
Formula for calculating residential property tax.
Annual Property Tax= Gross Annual Rental Value (GARV) * (17%-30%) slab rate to be determined based on MRV as fixed by GHMC – 10% depreciation + 8% Library cess.
GARV= Plinth area * Monthly Rental Value in Rs/sq ft * 12.
Plinth area is a total area including the premises (balconies and garages). To determine monthly rental value for self-occupied properties, rental of other similar properties in the same locality needs to be considered. In case of let-out properties, rental value is to be determined with the help of the rental agreement.
|Monthly Rental Value||General Tax||Other Tax||Total|
|Up to 50||Exempt||Exempt||Exempt|
|300 and above||15%||15%||30%|
Formula for calculating commercial property tax.
Annual Property Tax=3.5 * Plinth Area in sq.ft * Monthly Rental Value in Rs/sq.ft.
The Monthly Rental Value for a Commercial property depends only the locality. It differs from area to area.
The property tax for cellular towers, ATMs and hoardings is the maximum with a monthly rent of Rs. 50-Rs. 70 per sq. ft.
Hospitals, educational institutions and hostels are levied at the minimum with a monthly rent of Rs. 8 and Rs. 9.50 per sq. ft.
GHMC gives a privilege of paying property tax online. Every tax payer is given a unique identification number called Property Tax Identification Number (PTIN) for each property. In case of old users, the PTIN is of 14 digit, and for new users, it is of 10-digit number. Let us see the process/steps to make the payment online.
Property tax can be paid offline at service centres, Mee-Seva Centres, Bill Collectors, AP Online Service Delivery or any State Bank of Hyderabad Branch. The Check or Demand Draft can be drawn in favour of ‘Commissioner, GHMC.’
Although GHMC provides all the facilities to the citizens of Hyderabad, there are few deadlines and penalties for payment of property tax. Below are the dates and penalties.
The individuals are asked to submit the sale deed, occupancy certificate, etc. after purchasing a new property to area Deputy Commissioners for the property tax assessment. Further, concerned Tax Inspector/Assistant Municipal Officer/Valuation Officer will verify the legal title and litigation (if any) and inspect the building physically and access the property tax according to the rates of residential and non-residential properties. After the completion of this process, a unique PTIN will be issued for the new assessment of the new property.
However, GHMC has introduced Online Self-Assessment of new property called Online Self-Assessment Scheme. The process is as follows:
GHMC has few exemptions and concessions for the tax payers.
A. Click on ‘Tax Receipt’ option and generate the challan. Check with the details mentioned on the screen and print.
A. Click on ‘Search your property tax’ on the left menu. Choose your GHMC Circle. Enter your House number details. Click on ‘Search’. PTIN is displayed on the screen.