Taxes are one of the major sources of revenue for the government, which helps them fund various amenities to be provided to the general public of the country. Taxes are levied on various things, such as income tax on income, GST on goods or services, etc.
Certain taxes are governed centrally, certain other taxes are state-specific, and revenues are received by various states for the purpose of funding the State budget. Property tax is one such tax levied by the state government through the local body on real estate, including vacant land year on year basis. This tax is imposed on the owner of the property.
A property tax levy is delegated to various municipalities within the states to ensure efficient and smooth maintenance of civic amenities in various localities, such as maintenance of local roads, drainage, cleanliness in the area, public parks etc. Property tax is governed by the state government and further delegation to various municipalities results in differences in the basis of levy, computation, mode and manner of its payment.
Property that is included for property tax purposes generally includes independent buildings (residential and commercial), Flats and apartments, Shops, Godowns, vacant land, etc. So owning a property has its own complications, and understanding the nuances of property tax is also important for an individual in finance and tax planning as well.
In this article, we will be simplifying property tax levied by the Bengaluru municipality to help our readers understand and plan their Bangalore property tax payments in a better way.
Owners of properties in Bengaluru are liable to pay property tax to the Bengaluru Municipality body called Bruhat Bengaluru Mahanagara Palike (BBMP) every year. The municipal body utilises these funds to provide civic facilities in Bengaluru. The BBMP follows the Unit Area Value (UAV) system for calculating the amount of property tax. The UAV is based on expected returns from the property, depending upon its location and the nature of the usage of the property.
The computation of property tax is done based on the per sq. ft. per month (UNIT) that is fixed based on the location of the property (AREA) and multiplied by the current property tax rate (VALUE). The jurisdiction of the BBMP is divided into six value zones based on the guidance value published by the Department of Stamps and Registration. The property tax rate will differ according to the zone in which the property is located.
In Bangalore, the property tax rate differs for tenanted and self-occupied properties. The property tax rates for six zones are as follows:
Building Type | Status | Zones | |||||
A | B | C | D | E | F | ||
RCC or Madras terrace | Tenanted | 5 | 4 | 3.6 | 3.2 | 2.4 | 2 |
Self-occupied | 2.5 | 2 | 1.8 | 1.6 | 1.2 | 1 | |
RCC/Madras with cement or red oxide flooring | Tenanted | 4 | 3.5 | 3 | 2.5 | 1.6 | 1.4 |
Self-occupied | 2 | 1.75 | 1.5 | 1.25 | 0.8 | 0.7 | |
Tiled or sheet | Tenanted | 3 | 2.5 | 2 | 1.6 | 1 | 0.8 |
Self-occupied | 1.5 | 1.25 | 1 | 0.8 | 0.5 | 0.4 | |
Hutments and housing for the poor | Tenanted | Annual composite tax of Rs. 80 + cess | |||||
Self-occupied | Annual composite tax of Rs. 160 + cess | ||||||
Special Category | Tenanted | Annual composite tax between Rs. 200 and Rs. 2000 plus cess (based on built-up area) | |||||
Self-occupied | Annual composite tax between Rs. 100 and Rs. 1000 plus cess (based on built-up area) |
Building Type | Status | Zone A | Zone B | Zone C | Zone D | Zone E | Zone F |
Non-residential buildings without A/C | Tenanted | 20 | 14 | 10 | 8 | 6 | 3 |
Self-occupied | 10 | 7 | 5 | 4 | 3 | 1.5 | |
Non-residential buildings with escalators | Tenanted | 20 | |||||
Non-residential property with central A/C | 5000 sq ft or more | 20 | |||||
4999 sq ft or less | 18 | ||||||
Non-residential property (Hotels/Restaurants) | Room Rent ≥ Rs. 2000 | 14 | |||||
Room Rent Rs. 1000-1999 | 10 | ||||||
Room Rent < Rs. 1000 | 8 | ||||||
Cinema theatres and multiplexes | Cinema Theatre | 4 | 3.5 | 3 | 2.5 | 2 | - |
Multiplex Cinema | 20 | ||||||
Touring Theatres | 8000/year (fixed) | ||||||
Semi-permanent Theatres | 10,000/year (fixed) | ||||||
Private hospitals and nursing homes | - | 4.0-6.0 | 3.5-5 | 3-4.5 | 2.5-4 | 2-3.5 | - |
Kalyana Mantapa, community/party halls | - | 6 | 5 | 4 | 3 | 2.5 | - |
Industrial Buildings | Tenanted | 8 | 6.5 | 5 | - | - | 0.5-1 |
Self-occupied | 4 | 3.25 | 2.5 | - | - | - | |
Excess vacant land | - | 0.5 | 0.4 | 0.3 | 0.25 | 0.2 | 0.12 |
Service charges on buildings (exempt from property tax) | - | 6 | 5 | 4.5 | 4 | 3.5 | 3 |
Telecom towers on property | - | 12,000 + cess/tower | |||||
Hoardings and billboards | B Zone (<150 m²) | 12,000 | 15,000 | 7,000 | 10,000 | - | - |
Property tax (K) = (G – I)*20% + Cess (24% of property tax) |
Where
G = Gross unit area value arrived by X+Y+Z and I = G*H/100
X = Tenanted area of property x Per sq. ft. rate of property x 10 months
Y = Self-occupied area of property x Per sq. ft. rate of property x 10 months
Z = Vehicle parking area x Per sq. ft. rate of vehicle parking area x 10 months
H = Percentage of depreciation rate, which depends upon the age of the property
Hence, property tax is equal to 20% of the total area of the property (tenanted, self-occupied, and vehicle parking area) multiplied by per sq. ft. rate fixed by BBMP for each kind of usage of property for 10 months reduced by depreciation allowed by BBMP plus 24% cess on property tax.
Please note that depreciation can be claimed once in the block period. No additional depreciation can be claimed for the year 2017-18 and 2018-19 and 2019-2020, if already claimed in 2016-17 as it can be claimed only once in a block period (i.e., 2016-17 to 2019-20)
The Frequently Asked Questions (FAQs) on BBMP property tax help in understanding detailed technicalities in computing X, Y and Z values above.
Anyone paying BBMP tax either manually or online needs to use the following 6 forms:
Form | Applicability | Remarks |
Form I | Property with Property Identification Number (unique PID assigned to each property which is a combination of your ward number, street number and plot number) and this can be found on the last property tax payment receipt. | These are properties in the erstwhile BBMP area, and the form is printed in white colour. |
Form II | Property without PID but only Khata number (number of the khatha certificate that is issued for each property and contains all the details relevant to that property). | These are properties in erstwhile CMC (City Municipal Corporation) and TMC (Town Municipal Corporation) and 110 villages that have been newly added to BBMP. The form is printed in pink colour. |
Form III | Property without PID or Khata number | These are unlawful/ unauthorised properties built without the sanction of local planning authorities, and the form is printed in green colour. |
Form IV | When there is no change in the property details, such as the extent of built-up area, usage or its occupancy, etc | Form is printed in white colour |
Form V | When there is a change in the property, including when the property changes from residential to non-residential | Form is printed in blue colour |
Form VI | For the payment of service charges when the property is exempt from payment of property tax |
Paying your property tax in a single installment before the BBMP's due date grants you a 5% rebate. However, delaying payment incurs a monthly interest rate of 2%. You can also pay in two installments to avoid interest, but without the rebate, ensure it's done by July 31st.
Online mode
Manual mode
The BBMP has also tied up with the following banks for property tax payments:
If you have chosen challan payment while filling the form online, you can pay the tax at any of the above centers or banks.
Taxpayers can pay their overdue taxes to BBMP via BDA’s online portal- www.bdabangalore.org/ or https://propertytax.bdabangalore.org. They first need to be registered on BDA’s portal and sign in to make payments.
Follow the given detailed steps to easily pay your property taxes online:
Upon successful payment, you will get an SMS and email confirming your payment. You can also print or download a receipt of your paid taxes.
Property tax paid can be deducted from the Gross Annual Value (GAV) of the property while computing income under house property in the FY in which it is paid if the following conditions are satisfied:
You can check the status of the BBMP tax paid application after making the payment of the BBMP property tax online. Follow the below process to check the BBMP tax payment status:
Follow the below process to download the BBMP property tax receipt:
BBMP is launching a contactless, faceless, and online digital e-Khata issuance system. The BBMP has already digitised all 21 lakh existing BBMP Khatas, and the roll-out will begin soon. BBMP issued a notification that as part of the issuance of e-Khatas, the BBMP staff will visit houses and capture the property's GPS. The property GPS will be crucial for the issuance of e-Khata, and it serves as a unique identifier for each property.
This initiative aims to streamline the e-Khata process, making it easy for property owners to secure official documents for their properties. It assigns GPS coordinates to all properties, ensuring they are mapped correctly to prevent fraudulent claims.
The following properties are covered under the ambit of BBMP property tax:
The Department of Stamps and Registration has published guidance values that divide BBMP's jurisdiction into 6 value zones. The rate at which property tax is charged depends on the specific zone where the property is situated. Below are the different zones in Bengaluru, along with their respective sub-divisions, ward numbers, and names:
The property tax rates will vary depending on the specific zone in Bengaluru where the property is located.