The manner of payment of Chennai Corporation property tax and all the important inputs on Chennai Property tax online are things you will get to know if you read on.
A property owner has certain duties and obligations towards payment of property tax to the municipal corporation of a city or a town. The said tax is assessed after the property is registered in the name of the owner and mutation of the same is done. The person liable to pay the tax or the owner of the property is supposed to pay the property tax to the municipal corporation of a city or a town in which the property is located.
If you are the owner of a property in the urban area of Chennai, you have to pay the property tax to the Greater Chennai Corporation (GCC). One should know the way of paying Chennai Corporation property taxbut before that one should be aware of some terms concerning the property in Chennai which are as follows:
Property tax:
A property tax in Chennai is the tax levied by the government on the owner of any property in Chennai for owning a residential or commercial property. It is paid to Greater Chennai Corporation.
- Frequency of payment
Property tax is to be paid before April 15th for first half-yearly and before 15th October for the second half of the year, respectively.
- Penalty for delay in payment
The penalty is imposed @ 1% per month for non-payment or late payment of property tax.
The Steps before Payment of Property Tax Chennai
The transactions concerning the purchase of property or construction of property have to be registered with the GCC and after which there are certain steps to be followed by the owner before he pays the tax to GCC.
Property Tax Assessment application
There will be an application made by the owner in a prescribed format to the GCC and the GCC will assess the valuation of the property.
- This application will be addressed to the office of the revenue officer or zonal officer or assistant revenue officer. The application shall be submitted along with documents such as approved plan, tax receipt, a title deed, and so on. After receiving the application, the concerned authority will inspect the property and do the valuation.
Valuation of property tax
- For valuation of property owned in Chennai, reasonable letting value method is employed which is the basis for determining property tax payable.
- The rental value is calculated by multiplying monthly rent value which is based on the rate per sq ft by 10.92. The property tax value will be known after multiplying annual rent value with the rate of tax. This property tax is payable.
- There is a provision for tax concession of different rates. A concession of 20% is for monthly rental value for the semi-permanent building. For the building occupied by the owner, 25% concession is permitted over monthly rent for residential building and 10% for non-residential buildings.
1% per year is the rate of depreciation allowed for the building that is more than 4 years old. Maximum concession will be 25%. For different buildings like a nursing home or hospital or a star hotel, etc. a different method of assessment is allowed. Other buildings in this category are the cinema hall.
Tools used:
There is a GCC website that provides for a tax calculator that will let you know exact tax payable. It will be done after filling in details of the property. To assist the taxpayers there is a detailed guideline in place.
Tax payment
The tax can be paid both online and offline. There is an online payment option provided by the website. Once the payment is made online, there is a system of generation of receipt of payment. It is known as “Online Property Tax Payment.”
There is a tie-up with some scheduled banks that will allow payment of property tax through ATMs of the banks or in the branches of these banks. Almost all the banks allow such payments but this facility is available to the bank customers only. The receipt is generated after the payment is deposited. The property tax receipt is proof that the person in whose name receipt is generated is the owner of the property. The receipt can also be used to get loans from banks against the property or it can be used for registration of property also.
Factors affecting property tax
There is a system of Reasonable Letting Value or RLV to calculate the property tax of the building and GCC allows this system. The method is a calculation of annual rental value based on some factors which are then divided to get the half-yearly sum.
Property tax varies from state to state and region to region. The tax is based on the locality of the building, its quality and its use. There are the following factors used to calculate property tax:
Total built-up area: It includes sq ft area, wall area, area of the corridors and other common areas as used by other residents of a property like stairs.
Basic rate: Basic rate of a location is a basic rate that is determined before on the area in which the property is located.
Occupancy Type: The property tax also varies depending on whether the owner occupies the property for a personal residence or it is rented. It is known as the type of occupancy.
Use of property: The tax also differs based on the usage of property that is whether the property is used for residence or commercial purpose.
Age of the building: Property tax also depends on the age of the building. So, building’s age is one of the important factors to come up with the property tax.
The ways of paying property tax
If you log in to GCC website and then calculate and pay the property tax, you can pay the tax online most securely. To calculate tax, you can do so manually after visiting the property tax guidelines on the website. You can calculate the amount of tax to be paid precisely.
There may be difficulty calculating the taxes or the amount calculated manually many not match the generated amount from the computer online, you may complain with revenue officer at 044-25383614.
Where to pay tax
You can pay your taxes manually at the Zonal office of your area but it is advisable to pay online because that is supposed to be the most convenient way of paying taxes. You may also visit the concerned revenue officer or you can deposit the cheque in a bank.
Time of payment of tax
Property tax is collected on a half-yearly basis and the last date of payment of the recurring amount is 31st March and September 31st. It may so happen that your forget paying your taxes within time, there is a provision of 1% of the amount to be charged as fine every month and it will be added to your total tax payable.
Purpose of paying property tax
The tax so collected as property tax is utilized by the GCC to spend on municipal civic amenities like roads construction, building infrastructure, building schools and other amenities.
There is a user-friendly tax calculation system in Chennai which is better than other cities of India. Entire taxation system here is digital for safety and security of the transaction. The newly enacted real estate act and new GST act have impacted the system positively. This should be high time you invested in real estate property and get the dreams true for yourself.
About measurement of property tax in Chennai
There is an innovative and new system that Chennai Municipal Corporation has come up with that determines the amount of tax the citizens owe. This new system of calculating the tax is very different from that of the past.
This formula emphasizes the tax is calculated based on the street of the house rather than the area in which your house is located. Calculation based on location was the previous system. This calculation incorporates the cost of construction and value of the property. Every street has its tax rate that depends on the guidelines provided and the value of rent per month.
These are considered for assessing property tax:
- Plinth area
- The rate of tax prevalent in a street
- Residential type or non-residential type of building
- Type of occupancy that is owner or tenant
- The age of the building
The core area that is neighborhoods will bear 50% hike in taxes and the new areas that are added will have a 10% hike. There were some extended areas such as Shollinganallur had a different calculation for property tax. Today, the difference is not there and there is a common calculation. The extended areas are now merged with the civic body and its tax rates have gone up in the form of base street rate. It has become a major component in tax calculation. There is an assimilation of all the values of areas done by the corporation and annual rent value has been worked out. This action will not reduce the difference between areas and the reason is some areas have a BSR between 1.25 and 4 which are higher than core areas but it will be hiked to about 10%. 50% is the cap on the hike in taxes in residential areas.
Some residents of added areas are disappointed due to the hike but they have to go with the hike and adjust themselves. In general, the residents are quite happy with the merger because they witness the roads have become better developed and there is a better grievance handling by the municipal corporation. And the residents of most of the core area will not have much different payment and hence, they won’t be much affected.
General Revision of Property Tax, 2018
Out of total 45856 streets, percentage of Basic Street Rates revised for residential and non-residential properties is stated below:
Residential Non- Residential
10% to 20% 11821 streets 10% to 25% 1903 streets
21% to 30% 1453 streets 26% to 50% 2879 streets
31% to 40% 14469 streets 51% to 80% 18042 streets
41% to 50% 18113 streets 81% to 100% 23012 streets
Total 45856 streets Total 45856 streets
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