Property tax online payment: A guide to calculation and compliance

Understanding property tax
Property tax is a mandatory levy made by municipal governments on property holders. If you have a dwelling house, land plot, or commercial building, this tax is utilized to fund civic facilities such as roads, drainage, sewage, waste disposal, and streetlights. The tax varies from city to city and is determined by the area, utilization, and market value of the property.

Methods of property tax calculation
Different cities use different methods of calculating property tax. Some cities use annuity rental value system where the approximate annual rent of the property serves as the basis of calculation. In others, it is the capital value system where a proportion of the market value of the property is considered. Some use the unit area system, which considers the built-up area and multiplies it with a predetermined per-unit rate. Your local corporation’s rules will determine which method applies to you.

Factors that influence the tax amount
Other than the method of calculation selected, various other factors determine the amount of tax you must pay. The kind of property, residential, commercial, or industrial, has a direct impact on the rate. The age and size of the building, whether occupied or not, and the area in the city also play a factor. A property that is in the middle of the city, for instance, will have a higher tax than one in the suburbs.

Steps to pay online property tax
Most of the municipal corporations have provided a facility to pay property taxes online through their websites. To pay online, you get logged in to the portal and search for the property tax section. There, you enter your property details in the form of distinct property identification number, owner name, or ward number. Outstanding amount will be reflected on the system, and payment can be made via net banking, debit/credit card, or UPI. On successful transaction, digital receipt may be downloaded for record keeping purposes.

Why paying online makes sense
Online payment of property tax is transparent and convenient. It saves time and the trouble of visiting municipality offices and instantly generates receipt. A number of cities also encourage online payment with small rebates if paid earlier or in electronic mode, slashing your total tax amount. Online systems also ease tracking of previous payments whenever necessary.

Consequences of non-payment
Delayed payment of property tax will incur penalties and interest on the charges that increase your overall liability. Wilful default on multiple occasions can also have far-reaching consequences such as the local authority proceeding under recovery or attaching the property. Municipal corporations also publish defaulters' lists and can initiate proceedings, so timely payment of dues is important to prevent trouble.

Why staying compliant is important
Property tax is a civic duty that enables local infrastructure and services to function smoothly. With the facility to calculate and pay online, it has become easier and quicker. Being aware of how the tax is computed, being aware of factors influencing the tax, and paying online can make you compliant and avoid penalties.