A property tax is an annual tax which is deposited to the civic body that has jurisdiction in that particular area. Whether public, private, residential or commercial, property tax is levied on all the buildings. It is the responsibility of every citizen to pay property tax timely.
Procedure to calculate and pay property tax in Chennai
A property owner who lives in Chennai is liable to pay property tax to the Greater Chennai Corporation (GCC) every year. In order to calculate the annual rental value of a property, GCC adopts the system of Reasonable Letting Value (RLV). This value is further used to calculate the half-yearly property tax applicable for properties across the city.
How to calculate property tax in Chennai?
While assessing a property, the GCC takes following values into consideration:
- Plinth area
- Basic rate of the street in which the property is located
- Usage of the building (residential or non-residential)
- Nature of occupancy (owner or tenant)
- Age of the building
While an online property tax calculator is the best way to calculate property tax, one can calculate the value manually with the following formula:
|Plinth Area x Basic Rate per sq.ft. (say 100 sq.ft. x Re.1.00)||Monthly rental value = Rs.100 per month.|
|Annual rental value = Rs.100 x (12 months) – 10% for land. Annual value for building only||Rs.1,200 – Rs.120 = Rs.1,080.|
|Less 10% depreciation for the building (repairs / maintenance)||Rs.108 (which is 10% of Rs.1,080).|
|Depreciated value of the building||Rs.1,080 – Rs.108 = Rs.972.|
|Add 10% of the land value||Rs.120 (which is 10% of Rs.1,200).|
|Annual value for land and building||Rs.972 + Rs.120 = Rs.1,092.|
Here 10.92 is the common factor that can be used to calculate the annual value of all buildings. Multiply the annual rental value with 10.92 to arrive at the annual value of any building.
After calculating the annual value, a half-yearly tax is calculated which could vary based on the grade. For calculating a half-yearly percentage, Annual Value has 4 different types of calculation method. These are:
- 62% of the annual value of Rs.1.00 to Rs.500
- 92% for properties with annual value of Rs.501 to Rs.1000
- 02% for properties with annual value of Rs.1001 to 5000
- 40% for properties with annual value of Rs.5001 and above
The GCC also offers rebates on some property tax payments. These include:
- 20% rebate over the Monthly Rental Value is provided for semi-permanent buildings (that are tiled, thatched, etc. except terrace roofing).
- If the building owned by property owner is residential, than a rebate of 25% rebate over the Monthly Rental Value is provided. On the other hand for commercial building, the rebate value is 10%.
- 1% depreciation is provided for each year for buildings over 4 years old.
Modes of Payment of Property tax
With the advent of digital medium, one can easily pay property tax on the online web portal of Greater Chennai Corporation. Apart from that, tax can also be paid manually at the office of the revenue officer or the office of the assistant revenue or officer of the zonal offices I to XV and at any of the branches of Axis Bank, Canara Bank, City Union Bank, HDFC Bank, ICICI Bank, IDBI Bank and Indian Overseas Bank.
On the online portal, you just have to fill up all the details of the property and with the help of online tax calculator, the whole amount will appear on the screen. Submit the amount and take a print of the payment receipt and keep it with you for future documentation. Ensure there must be no errors; if there is any then correct them instantaneously.
In case of delayed payment, the GCC charges one percent penalty every month, on the unpaid amount.