The Simplest Way to Pay BBMP Property Tax. Have You Paid Yet?

IC: RealtyNXT

Earning an income and owning an asset comes at a price – paying taxes. There are some taxes that are to be paid at fixed intervals – one of them being property tax if you own a home.

In this post, we talk about:

• What is property tax
• How is property tax calculated
• How to pay property tax in Bengaluru

In simple terms, property tax is the amount that a property owner has to pay to the State Government through the local body for his/her area. The tax has to be paid by the owner every year. Property that is included for property tax purposes generally includes office buildings and residential homes.

Who Controls Property Tax?

The local municipal authorities assess the value of every real-estate property and accordingly declare a proportionate tax on the same, which can be paid by the property owner on an annual or semi-annual basis. The revenue generated is then used to maintain and provide civic amenities like road construction, lighting, or for the maintenance of public places like gardens. The rate of property tax differs from one area to another.

Factors That Decide Property Tax Calculation

Factors that determine the total property tax liability for the property owner include:

• Location and size of the property
• Whether the property is under-construction or ready-to-move
• Gender- In case a property is owned by a female owner
• Age – there may be discounts for senior citizens.
• Civic facilities offer by the local body

How is Property Tax Calculated

The BBMP follows the unit area value (UAV) system for calculating the property tax amount and is considered to be the most reliable and accurate resource. The unit area value is based on the expected return from the property depending upon the nature and location of the property.

First and foremost, the valuation of the property depends on the area it is in, occupancy status (whether it is self-occupied or rented out), property type (residential, commercial or land), kinds of amenities provided (car park, rainwater harvesting, store, etc.), the year it was constructed, type of construction (multi-storied/ single floor/ pukka or kutcha structure, etc.), floor space index and carpeted square area of the property. Once all these parameters are assessed, the civic agency calculates the property tax using a standard formula. The formula differs in different states. Property owners can calculate the tax amount with the help of the Self-Assessment System offered by BBMP.

The following process helps you understand the calculation in a simple manner:

To calculate your tax, you must first have to understand the zone in which your property lies i.e. the total built-up area, car parking area allotted to you, and the year it was constructed. You can also check these details from the BBMP website. If the sale deed does not mention the parking space that is allotted to you, then it is suggested that you calculate using an approximate area of 150 sq.ft.

The property tax self-assessment system is calculated on the basis of the Annual Rateable Value (ARV), which is the probable gross annual rent from the property from one year to another. Given below is an example of calculating property tax using this method:

Now, let us assume that the property lies in Zone D, the built-up area is 1000 sq.ft. and the car parking area is 150 sq.ft. Also, we are using the following variables:

T = (Tenanted area) × (Per sq.ft. rate of property) × 10 months

S = (Self-occupied area) × (Per sq.ft. rate of property) × 10 months

C = (Car parking area) × (Per sq.ft. rate of the car parking area) × 10 months

G = Value of gross unit area

H = Depreciation rate in %

I = Depreciation amount

J = Value of net unit area of the property after depreciation

K = Property Tax

Note: The rate per sq.ft of the property depends on the zone in which your property lies and can be determined in accordance to the Annexure 1 of the Property Tax Handbook, which is available on the BBMP website. The depreciation rate can also be determined with the help of Annexure 3 of the same handbook.

We are assuming that the Zone D rates per sq.ft. for tenanted, self-occupied properties and car parking area is Rs.3.20 per sq.ft., Rs.1.60 per sq.ft. and 0.80 per sq.ft respectively. We are also assuming that the depreciation rate is 3%. Here goes the calculation in this case:

G = (T+S+C)

I = (G×H)/100

J = G – I

K = J×20%

Considering our assumptions:

T = 0 × 3.20 × 10 = 0 (assuming that part of the property is tenanted)

S = 1000 × 1.60 × 10 = 16,000

C = 150 × 0.80 × 10 =1,200

G = (T+S+C) = 17,200

I = (G×H)/100 = (17,200 × 3)/100 = 516

J = G – I = 17,200 -516 = 16,684

K = J×20% = 16,684 ×20% = 3337

The basic property tax that one has to pay is Rs.3337. However, one must also add 24% Cess to this amount.as mentioned in the Annexure 1 of property tax.

3337 ×24% = 801

Hence, the amount of property owner has to pay is 3337+801 = Rs. 4138

(Source: https://bit.ly/35IXU13)

How To Pay Property Tax in Bengaluru

There are two different ways of paying BBMP Property Tax: Online and Offline

Offline payment method:

• Fill up all the forms with accurate information.
• Submit them at authorized centers or banks.

Note: Taxes amounting up to INR 1,000 can be paid by cash. However, exceeding this amount will have to be paid through online platforms, credit/debit cards, or demand drafts in favor of ‘Commissioner, Bruhat Bangalore Mahanagara Palike’.

Online payment method:

• Visit BBMP property tax portal i.e. https://bbmptax.karnataka.gov.in/
• First, you need to enter the SAS application number or PID (both available on the last receipt) and then, click on ‘Fetch’. It will display the property details
• If the information displayed is correct, then click ‘Continue’ and it will take you to Form IV.
• If in case you need to change the information like the built-up area, or its occupancy, check the box on the page and then click ‘proceed’ which will take you to Form V.
• Ensure that the details filled in the displayed form are correct and then proceed to make payment either in full or in installments and through challan or via the online payment method.
• Choosing the online payment mode, the page will redirect you to pay via net banking or credit/debit card.
• Complete the payment

Once the payment is done, a receipt number will be generated. For e-receipt to be available on the portal, it takes 24 hours. Once it is available, you can either print or download it.

(Source: https://bit.ly/2FL8PMH )

What Kind of Properties is Taxable in Bangalore?

These include:

• Residential houses (both self-occupied or rented)
• Apartments and Villas
• Factory and Office buildings
• Shops
• Godowns

Interest on Property Tax

A property owner has to pay some fine if paid late, generally equivalent to a certain percentage of the amount due. The amount varies from state to state. Some states also waive off penalties on property tax while Bangalore decided to slash interest from 20% to 10% for late payments, in order to make more people pay their dues.

COVID-19 & Property Taxes

IC: SAG Infotech

One of the major revenue sources for the Bruhat Bengaluru Mahanagara Palike (BBMP), property tax, has dropped on account of the pandemic. Furthermore, it stated that the civic body which gives a 5% rebate on property tax payments has extended the rebate period for one month. This was because, in April, it was able to collect just over ₹400 crores.

FAQs

What is the penalty for the late payment of property tax in Bangalore?

If you fail to pay within the stipulated time, an interest of 2% per month on the taxable amount is charged by the authority.

How do I pay my BBMP tax online?

Visit https://bbmptax.karnataka.gov.in/ and refer to the steps outlined above.

What is PID number and where can you find it?

According to the BBMP website,” The PID Number is a combination of Ward number– Street Number-Plot number. A unique street number has been assigned to each and every Street and within the street a property number has been assigned.”

Which are the authorized banks to collect BBMP Property Tax?

• Maharashtra Bank
• Canara Bank
• HDFC Bank
• Axis Bank
• IDBI
• Indian Overseas Bank
• Kotak Mahindra
• SBI
• Indusind Bank
• Corporation Bank
• YES Bank
• Indian Bank
• ICICI Bank
• BBMP Website