InvestorQ : What is property tax in India? How to calculate such tax?
Ria Jain made post

What is property tax in India? How to calculate such tax?

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shivangi Arora answered.
1 year ago
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Property tax is a one-time recurring charge that a person needs to pay every year. It a tax levied by the local municipal corporation of a state. The government provides different services such as water supply, drainage services, maintenance of roads and other civic facilities, in lieu of these services the government charges a tax called property tax. It is one of the major sources of revenue to the local government.

How to Calculate Property Tax?

There are 3 different ways in which property tax is calculated:
Capital value system: Under this system, the tax is levied as a percentage of the market value of the property. The market value id based on the locality of the property and the state government determines it. The market value is revised each year and published regularly.

Annual Rental Value System: In this system, the yearly rental value of the property is used to calculate the property tax. The municipality decides the rental value based on their assessment of different factors such as location, size, amenities, condition of the property, proximities to facilities such as hospitals, schools, etc.  

Unit Value System: Under this system, the price unit price of the built-up area of the property is taken into consideration. The price is fixed on a per square foot per month basis on expected returns of the property, in accordance with its location, usage, and price of land. The result is then multiplied by the built-up area of one’s property.
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