1. Introduction
Taxes are one of the major sources of revenue for the Government which helps them in funding various amenities to be provided to general public of the Country. Taxes are levied on various things such as income tax on income, Goods and Service Tax on goods or services etc. Certain taxes are governed centrally and certain other taxes are state specific and revenues are received by various states for the purpose of funding State budget.
Property tax is one of such tax levied by the State Government through local body on real estate including vacant land year on year basis. This tax is imposed on the owner of the property. 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 being governed by State Government and further delegation to various municipalities results in difference in basis of levy, computation, mode and manner of its payment.
Property that is included for property tax purpose generally includes independent building (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 Bengaluru municipality and tax benefits of property tax to help our readers understand and plan their bangalore property tax payment in a better way.
2. About Bruhat Bengaluru Mahanagara Palike Property Tax
Owners of properties in Bengaluru are liable to pay property tax to 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 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 nature of usage of the property. The computation of property tax is done by multiplying the area of the property by per sq ft tax rate per month (UNIT) that is fixed on the basis of location of the property (AREA) and multiplied by 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. Click here for zonal classification details for BBMP property tax purpose:
3. Payment of BBMP Property Tax
- Property tax period starts from April of one year and ends on March of subsequent year and tax to be paid within 30 April of the subsequent FY of the financial year (FY). Current property tax FY is 2017-18
- BBMP also offers 5% rebate on property tax paid in one installment within due date stipulated by BBMP
- Delayed payment of property tax attracts interest at 2% per month or 24% per annum
- Property tax can also be paid in two installments without any interest and without rebate
4. Computation of Property Tax
| 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 total area of 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 block period. No Additional depreciation for the year 2017-18 and 2018-19 if already claimed in 2016-17 as it can be claimed only once in a block period i.e., 2016-17 to 2018-19])
Please refer the below link which provides Frequently Asked Questions (FAQs) on BBMP property tax which helps in understanding detailed technicalities in computing X, Y and Z values above.
Depreciation rates here
Per sq ft rate based on usage and zonal division here
Anyone paying BBMP tax either manually or online, need to use following 6 forms:
| Form |
Applicability |
Remarks |
| Form I |
Property with Property Identification Number (unique ID 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 form is printed in white color. |
| 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. Form is printed in pink color. |
| Form III |
Property without PID or Khata number |
These are unlawful/ unauthorised properties built without sanction of local planning authorities and form is printed in green color. |
| Form IV |
When there is no change in the property details such as extent of built up area, usage or its occupancy etc |
Forms is printed in white color |
| Form V |
When there is a change in the property including when property changes from under-construction to constructed |
Form is printed in blue color |
| Form VI |
For the payment of service charge when property is exempt from payment of property tax |
|
6. How to pay BBMP Property Tax
BBMP property tax can be paid either manually or online.
Online mode
- Enter earlier SAS Application Number or PID (both available on last receipt) and click on ‘Fetch’ which will display property owner details
- Click on ‘proceed’ if details displayed are correct and no changes in the property and this will take you to form IV
- If there are any changes in the property such as property usage, built up area or its occupancy, check the box provided on the page and then click on ‘proceed’ which will take you to form V
- Ensure details pre-filled in the form displayed including tax computation are correct and / or modify relevant details in case of change and proceed to pay either fully or in installments and either via online or via challan
- Choosing online payment option will take you to payment page where you can choose to pay either through net banking or credit / debit card and complete the payment. Once the payment is completed, a receipt number will be generated and it takes 24 hours for E-receipt to be available on the portal. Receipt can be printed/downloaded here:
- If you face any problem while paying online and payment is incomplete, you can resume the payment using current SAS Application number here:
- Further, for any problems faced while using online mode, you can contact BBMP either at contactus@bbmp@gmail.com or raise complaint here:
Manual mode
- Fill all the applicable forms take them to either of the following and pay either by card or a Demand Draft:
- Bangalore 1 centre
- Assistant Revenue Officer offices
Following banks also have been authorised to collect the tax:
- Canara Bank
- Axis Bank
- HDFC Bank
- ICICI Bank
Link to bank branches of authorised bank can be accessed here
Also interesting to note that BBMP has tied up with the following banks for property tax payment
- IDBI
- Corporation Bank
- Indian Overseas Bank
- YES Bank
- Kotak Mahindra
- Indian Bank
- SBI
- Maharashtra Bank
- Indusind Ban
If you have chosen challan payment while filling the form online, you can pay the tax at any of the above centres or banks.
7. Tax Benefits
Property tax paid can be deducted from 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:
- GAV of the property is not NIL (self occupied house property)
- Property tax is paid by the owner
Frequently Asked Questions
-
I have paid property taxes for my rental property relate to previous year, can I claim the benefit under house property now ?
Yes, you can claim benefit of property tax paid on actual payment and there is no restriction as to which year the property tax is related to
-
Is there any limit for the as to the amount to be claimed as property tax ?
No there is no limit as to the amount of property tax to be claimed as deduction.
-
Can I claim the property tax paid on the self occupied property ?
No, property tax paid on the self occupied property cant be claimed as deduction from house property income.
