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Property Tax
Undone by all that fuzziness about assessing your property tax? CHARITHA helps you understand the procedure of self-assessment of your property tax in the best manner.
The taxman knocketh, and just when you thought you'd him all figured out, he's in a different garb. Well, whatever the habit be, the impact is the same - he makes you acutely aware of your general ignorance of those oh-so-simple laws. He also has the uncanny knack of being able to interpret anything in any manner. So, before fear of the unknown clutches you in its vice-like grip, let's arm you with some general knowledge of property tax and its meaning for you!
Let's get our basics right first. Property taxes are paid on land and buildings. The land may be owned or leased. And buildings can consist of residential and non-residential complexes. Residential buildings are again categorized into individual houses and apartments complexes.
Non-residential complexes include hotels/restaurants, commercial complexes /markets, shops/offices/banks, cinema theatres, function halls, hospitals/clinics and other health related centers, educational institutions, factories/industries, and religious and charitable institutions.
WHO NEEDS TO PAY IT?
Section 204 of the Hyderabad Municipal Corporation Act, 1955 fixes the primary responsibility for levy and payment of property tax on the actual occupier. This may be the owner, the tenant or the lessee. Owners means both individuals and corporates. And it's not only individuals and commercial establishments that pay tax on their properties: the government pays tax on its properties as well.
WHEN DO YOU PAY YOUR PROPERTY TAX?
You can pay your property tax in advance in the month of April and October of every year (Section 264 of the H.M.C. Act, 1955). It is supposed to be paid every half year, but most of us end up paying once annually.
AND NOW FOR THE NITTY-GRITTY (THAT'S WHAT YOU REALLY NEED)
1. From where do you get the
forms and which form do you use?
2. How is the tax calculated?
3. How is the amount paid?
4. Who has the authority to assess and scrutinize the form submitted?
5. What happens when you don't pay on time?
6. What rights does the MCH have?
| FROM WHERE DO YOU GET THE FORMS, AND WHICH FORMS DO YOU USE? The forms can be obtained from the appropriate circle of the Municipal Corporation of Hyderabad under which your area falls. There are separate counters for property tax from where you can get the forms. The Hyderabad municipality is divided into 6 circles and Secunderabad is one circle. Each circle is divided into wards and each ward is divided into blocks. |
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Circle No |
Address |
Phone No |
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1 & 2 |
Goshmahal, Charminar | ||
3 |
6th Floor, Municipal Parking Complex, Opposite GPO, Abids | ||
4 & 5 |
Khairatabad, near Mint Compound | ||
6 |
4th Floor, Municipal Parking Complex, Opposite GPO, Abids | ||
You'll need to fill up a form called
the Self-Assessment of Property Tax Form / Return. There are two types of forms:
You don't need to attach anything - just the form and the cheque / DD need to be submitted. The forms are self-explanatory, so it shouldn't be much of a problem filling these up. The owner / occupier needs to furnish information of the land - whether the land was taken on lease or owned - and the details of the land area. Or if you own a building, the details of the building - like the type of the building (individual house or an apartment), the year of construction, the plinth area, the rent value occupancy details etc. - need to be furnished.
Guidelines for calculating the self-assessment tax are given along with the forms. Step 1 Step 2 If the rent received is low, you can use the prevailing market rent rates to calculate the tax. To arrive at the rent per square foot, divide the rental value by the area of the building or land (rental value/total area of building or land), this will give the Market Rental Value per square feet (herein referred to as MRV per Sft.) Step 3 For residential buildings, property tax = plinth area * MRV per Sft * 12 * tax rate. From this subtract 10% as depreciation and add 8% to this to be paid for library cess The tax rates to be multiplied depending on the rent received: For Non-Residential Buildings, i.e. commercial complexes, the same formula is used and there is a uniform tax rate of 0.30 (30% tax rate). Tax = plinth area * MRV per Sft * 12 * 0.30 - 10% as depreciation + 8% towards library cess The Municipal Corporation has identified large commercial complexes and has calculated the tax and put up notifications in such buildings, as to how much they have to pay. This is to prevent underpayment of tax. Vacant land tax shall be levied at 1% of the capital value of land.
The tax can be paid through cash, demand draft or cheque, drawn in favor of "Deputy Commissioner, Circle no X". The forms along with the cash, the DD or the cheque have to be submitted in the property tax counters of the Circle Office of the MCH that your locality falls under or you can also pay it in the head office of the MCH near the Secretariat.
Once the forms are submitted and the payments are through, the MCH starts valuation of the forms. The valuation officers do the assessments. There is a valuation officer for each circle, and a chief valuation officer at the Head Office to oversee the assessments done by them. The scrutiny of the forms starts within one month of the submission of the forms. WHAT HAPPENS IF YOU DO NOT PAY ON TIME? Section 269 of the HMC Act, 1955 states that when a person liable for property tax does not pay on time, the Corporation shall collect the tax with an interest of 2% per month or disconnect the essential services or confiscate the movable articles of the defaulter. If you have paid less than the amount ought to be paid, the MCH will reassess the amount and send you a notice directing you to pay the balance amount. If you have paid in excess, (no, you don't get a refund!) the MCH will adjust the excess amount to your next year's tax amount. WHAT RIGHTS DOES THE MCH HAVE? Every person, within one month of completion of his new building, should deliver a notice to the commissioner in writing and obtain permission to occupy the building. If you have, without the permission of the MCH, constructed or reconstructed your building, raised some unauthorized structures, or made some additional improvement to the building, then it (the MCH) will levy property tax with a penalty of 10% on the property tax till there is correction of the irregularity (this could mean demolition). Section 225 of the MCH Act, 1955 confers power on the MCH to alter the assessment on any land or building during the same financial year, which has been erroneously valued or assessed through fraud, accident or mistake. ] Section 238 of the HMC Act, 1955 says that the corporation can collect property tax arrears under the provisions of the Revenue Recovery Act. Section 176 of the Indian Penal Code says that when a person is legally bound to furnish information on any subject to any public servant, and intentionally omits to furnish the information in the manner and at the time required by law, he / she shall be punished with simple imprisonment for a term up to one month or more, or with a fine up to Rs.500 or more, or both. Section 177 of the Indian Penal Code says that if a person is legally bound to furnish information to any public servant and knowingly furnishes false information, he shall be punished with simple imprisonment for a term up to one month or more, or with a fine up to Rs.500 or more, or both. Section 213 of the HMC Act, 1955 states that every owner or occupier on whom such requisition is made shall be bound to comply with the same and to give true information or to make a true return to the best of his knowledge or belief. The Commissioner may call for information or returns from the owner or occupier of any property or enter and inspect assessable premises. Whoever fails to comply with any requisitions or contravenes any provision lawfully made upon him under sub section 1 and 2 of Section 213 shall be deemed to have been committed an offence under Section 176 and 177 of the Indian Penal Code. As per these sections whoever contravenes the law is liable for punishment for 1 month Simple Imprisonment and Rs.500 fine or both. Well, so that's it. We hope some of the nebulousness is now cleared. For more queries, it would be appropriate to call the relevant circle office and ask them. |
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