Andhra Pradesh Property Tax

Owning a property in any country levies a tax on the buyers. This tax is called the property tax, calculated based on the value of the property bought. In a regressive tax, the tax rate decreases as the taxpayer’s income increases. The tax to be levied is subjective to the local government, which decides the rate, and then this tax is paid by the property owners.

Paying property tax to the local government in Andhra Pradesh, India, is mandatory. This applies to both panchayats and municipal corporations, depending on the location. The property’s current market value determines the amount of tax that needs to be paid. There is a huge penalty if the tax is not paid on time. Property tax is one of the main sources of income for local bodies, and the revenue collected is used to improve the area’s infrastructure and civic facilities such as education, healthcare, water supply, sanitation, and roads. 

Taxable Properties in Andhra Pradesh 

Property tax in Andhra Pradesh applies to residential and commercial properties. Based on the assessment of the property, the tax amount is determined. If a property’s Annual Rental Value (ARV) is less than Rs. 600, they are exempted from paying the property tax, which only applies to residential buildings.

If a property goes under construction work, improvisation or renovation, the owner must notify the Department of Town Planning. This is important to ensure that the property tax assessment is done accordingly and the taxpayer isn’t overcharged.

Property taxes are calculated on different factors such as the property’s location, size, type, and purpose. The local governing body examines the worth of the property on a regular basis, and based on it, the tax rate is decided. 

Components of Andhra Pradesh Property Tax:

Section 85 of the Municipal Corporation Act states the council can levy taxes on all taxable properties. These properties are either buildings or unused lands situated within municipal boundaries.

There are four main components that the Andhra Pradesh property tax is made up of, and each of these components has its own unique purpose:

1. General Purpose Tax: The money generated for the general purpose tax helps in all the operations of the Municipal Corporation. This component aims to fund several local authorities’ administrative, infrastructural, and developmental projects.
   
2. Water & Drainage Tax: The tax generated for this component is used for services related to the drainage system and for uninterrupted water supply in Andhra Pradesh. The money generated from this tax is used to improve water distribution networks across AP and proper sewage treatment in each area.
   
3. Lightning Tax: This fund is used to maintain and improve the street lighting infrastructure around Andhra Pradesh. From a safety point of view, there must be well-lit street lights around the state.
   
4. Tax on Scavenging: Another property tax component is the Scavenging tax. This tax aims to collect, transport, and dispose of waste materials properly, leading to a cleaner and healthier environment for the citizens.
   

The Municipal Corporation in Andhra Pradesh relies on these elements of property tax to fund essential services. By collecting revenue in the form of tax, the local government can provide the citizens with basic and important services, and it can also maintain the urban infrastructure, which will ultimately improve the standard of living of its citizens.

Assessment of Andhra Pradesh Property Tax:

To assess the property owners’ amount of property tax that needs to be charged, the government assigns a person to evaluate the properties. This evaluation takes into account several factors, as mentioned above. But before the property tax assessment, a book that keeps all the records is created, and the property owner is informed about it. This record book has the following information:

• Serial number
• Property owner’s name
• Flat/Door number
• Locality
• Zonal number
• Construction type
• Nature of usage
• Plinth area in square meters
• Fixed monthly rental value per square meter of plinth area, according to Form A notification
• Rental value fixed for the property monthly
• Half-yearly property tax
• Date of service of special notice
• Date of receipt of revision petition
• Date of hearing
• Brief orders of the Commissioner
• Property tax fixed after disposal of the revision petition
• Commissioner’s initials

Calculating Andhra Pradesh Property Tax

The procedure of paying the property tax in Andhra Pradesh follows a systematic process considering various factors. This process can differ slightly based on the specific municipal department or urban local body. Several steps are required to calculate the Andhra Pradesh property tax:

Annual Rental Value (ARV): The first step is to decide the property’s Annual Rental Value (ARV). This value estimates the yearly rental revenue of the property if it is leased out. The local body calculates the ARV based on the property size, the location, the type of the property, amenities, and the market situation.

Property categorisation: Properties are categorised depending on their purpose. The properties are categorised into residential, commercial, industrial, or vacant. The tax rates can fluctuate depending on the property’s category.

Tax Rate: The relevant tax rate is applied after calculating the ARV and property category.

Extra Components: Depending on the rules of the Municipal corporation, there are additional taxes that are levied on other components, such as lighting tax, water and drainage tax, and scavenging tax, and this may be applied to the total tax amount.

Deductions, Exemptions, and Rebates: Properties used for religious purposes, government-owned properties, or concessions for senior citizens are eligible for tax deductions or exempt from paying tax.

Annual Rental Value:

The Annual Rental Value (ARV) is the standard amount the property rents. It is not necessary that the ARV should be equal to the rent paid for the space, instead reflecting the current market price of the rent of spaces.
Municipal property taxes are calculated using the Annual Rental Value of the property. This value is based on:

• The property’s zonal location
• The type of property (residential or commercial)
• The plinth area of the property
• How old the property is
• Construction style

The town planning section of the particular urban local body should provide all the necessary information related to the property’s condition. This helps calculate the annual rental value for Andhra Pradesh property tax.

Andhra Pradesh Property Tax Rates:

Online Procedure To Pay Andhra Pradesh Property Tax:

To make paying the property tax in Andhra Pradesh easier, you can go on the official website provided by the Commissioner and Director of Municipal Administration under the Andhra Pradesh government. 

To pay your Andhra Pradesh property tax online, follow the instructions below:

Step 1: Go to the official website – https://cdma.ap.gov.in/ 

Step 2: On the home page, search for the online payment link and click Property Tax.

Step 3: Select the District and Municipality where the property is located, then choose property tax from the drop-down list.

Step 4: When you click submit, the ‘property search’ dialogue box will pop up. Enter the required details and then search. It will redirect you to the Payment section.

Step 5: To view the amount that must be paid, click ‘Pay Tax’.

Step 6: Make the required payment using online banking or a credit/debit card.

Step 7: Go through the terms and conditions for your knowledge before clicking the submit option.

Step 8: Upon successful payment, an acknowledgement receipt will be generated.

Following these easy steps will help you to pay your taxes conveniently. This ensures compliance with Andhra Pradesh’s property tax regulations.

Additional Services

There are additional services provided on the CDMA portal, like:

• Vacancy Remission: Property owners are eligible for vacancy remission on their property tax if their property is vacant for an extended period of time. The owner can request this service by filing a vacancy remission on the portal.
  
• Filing Demolition: The value of property tax payable can change if the property is demolished or the land is unused. Filing demolition services on the portal will allow the property owners to convert the house tax to vacant land tax (VLT).
  
• Tax Exemption: Religious institutions or properties owned by charitable trusts are exempted from paying property tax. This provision is provided on the portal itself.
  
• Download Documents: Property owners can download relevant documents related to their property tax from the CDMA portal. 

Paying Property Tax with PuraSeva App

The government of Andhra Pradesh has launched the PuraSeva app to provide its citizens with a variety of municipal services which is easily accessible, including property tax payments. Property owners in Andhra Pradesh can use this app to pay their property tax. PuraSeva was created by the eGovernments Foundation and is the first fully integrated citizen and employee mobile application available on Google Play Store.

Offline Payment Method for Andhra Pradesh Property Tax: 

Property owners in Andhra Pradesh can pay the property tax offline. This means they can go to the municipal office’s Urban Local Body (ULB) counter or use the Citizen Service Centres, commonly known as PuraSeva centres, and speak directly with the personnel in charge of property taxes. The property owners should carry the necessary documents and the payment process details. 

Rebates on Property Taxes in Andhra Pradesh

A discount of 5% is granted to the Andhra Pradesh property taxpayers if they successfully pay the tax for the current fiscal year before April 30. A discount of 40% is offered on the ARV if the residential building is occupied by the owner himself, considering when the property was built.

Penalty for not Paying the Property Tax

In Andhra Pradesh, the property tax is collected twice a year, or semi-annually. An interest of 2% per month is levied on the due amount if the property owner fails to pay the property tax by the end of June for the first round or by the end of December for the second round. Additionally, a penalty is penalised for illegal constructions.

These penalties emphasise the property owners meet the deadlines of paying the property tax and contribute to local authorities’ financial well-being. These penalties also discourage illegal constructions that might impact the legality of the properties.

Conclusion: 

In conclusion, paying property tax is a civic responsibility that allows the local government to provide essential services and maintain civic infrastructure. Property owners can contribute towards the city’s development by understanding the payment methods, exemptions, and deadlines for the Andhra Pradesh Property Tax.

Frequently Asked Questions (FAQ’s)