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Before we get into the details of property tax in Delhi, we request our readers to go through our article on ‘BBMP property tax’ wherein we have discussed introduction of property tax in general and also tax benefits. With that background, we straight away start discussion on property tax in Delhi.
Budget 2021 update :It has been proposed to exempt the senior citizens from filing income tax returns if pension income and interest income are their only annual income source. Section 194P has been newly inserted to enforce the banks to deduct tax on senior citizens more than 75 years of age who have a pension and interest income from the bank.
Property tax are the principal source of revenue of urban local bodies/local municipal authorities to maintain the basic civic services in the city. As property tax administration is delegated to municipalities within the state, owners of properties in Delhi are liable to pay property tax to Delhi Municipality body called Municipal Corporation of Delhi (MCD) every year. Studies show that property tax base in developing countries has been declining due to lack of proper information, inefficient administration and procedural inadequacies. Therefore, MCD wishes to achieve its objective of providing transparent, accountable and efficient citizen-centric services to the citizens of Delhi through the use of Information Technology. Property tax division of MCD has initiated an innovative, broad based approach of Public-Private Partnership (PPP model). MCD levies property tax on all buildings including vacant land. Out of the three methods of computing property tax (i.e., Annual Rental Value, Capital Value System, Unit Area System), MCD chose to adopt Unit Area System which is also recommended by Government of India. Property tax in case of Unit Area System is a function of the built up area, the period of construction, the structure of building, location of property and use of property. While computation method is same for all kinds of properties, property tax rate varies for residential, rented residential, commercial, industrial properties. MCD is divided into North MCD, South MCD and East MCD. Further, the entire city of Delhi is divided into eight categories from A to H based on the value of properties in the colonies belonging to each of these categories.
Property tax = (Annual Value * Rate of tax)
Annual Value for building is arrived at as follows:
(Unit area value per sq metre * covered area of property * Age factor * Use factor * Structure factor * Occupancy factor * Flat factor)
Annual value for the vacant land is computed by using the below formula:
(Unit area value per sq metre * area of vacant land * Use factor * Occupancy factor * 0.3)
Unit Area System is a simple arithmetical system of calculation of annual value based on covered area of building /the vacant land by the unit rate for the category in which the building or vacant land is located. Overall property tax in Delhi is tax rate multiplied with value of property (arrived at considering total area, value per sq metre, age, use, structure and occupancy factor) Delhi Government appoints a Municipal Valuation Committee to determine categorization of colonies, unit rate for each colony and the multiplication factors. Refer here for use factor and rate of tax for various categories of properties. It may be noted that if different portion of building are put to different uses or the building has been constructed in stages, annual value needs to be computed for each such portion separately.
Payment online can be made using property ID allotted to the property which can be obtained from previous property tax paid receipt.
The online portal also provides details of property tax arrears and penalties, in addition to calculating late fees and interest amounts.
Payment of property tax offline can be made at any of the ITZ cash counters all across Delhi. Instant receipt is issued after the payment which contains property tax ID.
While we have provided below list of all exemptions / concessions, it may vary depending on whether the property belongs to North, South or East MCD.
Conditions for availing concession