Property tax is the utmost revenue source of various local urban governments all over the world. When it comes to accumulating property tax, the performance of the capital city Delhi is inferior compared to other Indian cities due to weak governance. According to various studies, the property tax base has started to decline owing to inefficient administration and a lack of appropriate information. The MCD wishes to attain its goal of offering accountable, transparent and efficient services to the Delhi citizens through the Public-Private Partnership model.

MCD Property Tax

MCD imposes a property tax on buildings and vacant land. There are three methods to calculate property tax namely, Capital Value System, Annual Rental Value and Unit Area System. MCD is divided into the South MCD, North MCD and East MCD. Additionally, the entire Delhi city is split into 8 categories from A to H, according to the property’s value present in the colonies. Though homebuyers are hesitant often to pay property tax, it is essential to pay it on time to prevent legal troubles and get tax benefits. If you are a Delhi homeowner, here are certain things you need to know regarding paying MCD Delhi property tax.

How to Calculate Property Tax?

In order to work out the MCD tax, the municipal corporation of Delhi espouses the Unit Area System suggested by the government. The tax that you pay on your property is a fraction of the built-up area, the building structure, the construction period, the property type, and its location. The property tax rates on residential, commercial, institutional and industrial property vary from each other.

If your home belongs to the A or B category residential property, you need to pay 12 percent property tax. If your home belongs to C, D or E category residential property, you should pay 11 percent tax. If it belongs to the F, G, or H category, you need to pay a 7 percent tax.

How to Pay Property Tax Online

To offer relief to taxpayers, various municipal corporations in the nation have established an MCD Tax Online Payment facility to pay property tax. To pay your house tax in Delhi, you just need an internet connection, debit/credit card, and the appropriate details. You will get an MCD property tax receipt after the successful completion of payment.

The authorities from the municipal department allocate a unique identification number to every property when you register your property. This ID helps in locating your property in government records.

You can pay property tax online by visiting www.mcdpropertytax.in. You need to enter your property ID and then follow the on-screen instructions. If you do not have a property ID, you can work out the property tax with the help of the Unit Area System formula.

Property Tax Rebates

If you belong to the senior citizen, ex-serviceman, or physically challenged category, the MCD will give you a tax rebate of 30% on your property tax. However, this applies to your property only if you occupy it for self-residing purposes. The 30% rebate is applicable only if your property’s total enclosed area is equal to 200 sq. meter on the basis of pro-rate. If the enclosed area is more than that, the formula to compute the rebate would be the Annual tax *200* 0.3/total enclosed area.

If you occupy a small flat, you might get tax rebates. If you happen to a cooperative group housing society flat or a DDA with the total enclosed area being just 100 sq meters, you will get a tax reduction of 10%. If you possess a group housing flat and if you pay your tax before the end of June of the present financial year, you are entitled to a tax rebate of 20%.

Why Pay Property Tax on Time?

You can pay your tax on a half-yearly or annual basis. Paying your tax on time will give you numerous benefits.

Early Bird Advantages

Many governments offer early-bird benefits to the taxpayer if they pay their property tax on time. There is no fixed or hard discount because various governments have different schemes to make sure utmost participation in tax payments.

Avert Late Payment fee

Paying up your property tax late has its pitfalls. You will be charged a late fee penalty which can amount to 5 to 20% of the tax amount. You have to pay the tax with pro-rata interest till March 31, which is calculated as the interest in ratio to the time that has passed. However, after March 31, interest and penalty will be imposed on your property tax payment.

Income Tax Benefits

If you have bought a new home, you have the right to claim tax deductions. You will be compensated for the payments or expenses you made towards registration and stamp duty. You need to get a NOC from the local corporation to get your property transferred to your name or finish the registration successfully and so without a property tax payment, you have the risk of missing out on this tax benefit.

Simple Payment Process

You do not have to stand in the queue in your corporation office anymore. You can easily make your property tax payment online.

Accomplish Your Tax Duties

Property tax payment is not just a legal responsibility but a moral one as well. The tax amount that you pay to the corporation is utilized to deliver social, infrastructure and civic services in your area. To get better schools, roads, and hospitals and maintain cleanliness in your locality, you must pay your property tax on time.

MCD Property Tax Calculation Formula

The formula that is used by MCD to calculate property tax is as follows.

Annual value x Rate of tax = Property tax

Annual value = Age Factor x Unit area value x Use factor x flat factor x structure factor x occupancy factor

The annual value is estimated by multiplying the rate of tax and the annual value in the unit area system.

Exemptions from Property Tax Payment

Some properties are entitled to property tax exemption. They include – government buildings, public worship places, charitable purpose used buildings, heritage buildings, cremation ground, and agricultural land.