Property tax along with other indirect taxes such as GST and stamp duty is governed by the Income Tax Act, 1961. According to this, individuals owning property, or any building is liable to pay property tax as per the provision mentioned under real estate tax regimes. Government of India charges property tax from the landowners through the municipal corporation or local government. Read on to know more about property tax and related information.
What is Property Tax?
Property Tax defined as every landowner or real estate owner of tangible assets such as residential buildings, office buildings, and others are liable to pay property taxes to the government bodies such as the municipal corporation or panchayat.
Property tax is mandatory for a person possessing residential, commercial or let-out property, and is payable either on a yearly or half-yearly basis as per convivence. The tax amount is determined depending upon the property location, current valuation, and law of the particular area.
Types of Property
Property in India is classified into four categories, which help the government estimate tax based on certain criteria. The different property divisions in the country are mentioned below.
- Land - in its most basic form, without any construction or improvement.
- Improvements made to land - this includes immovable manmade creations like buildings and godowns.
- Personal property - This includes movable man-made objects like cranes, cars or buses.
- Intangible property - In the form of licenses, patents, etc.
- Present State of Property Tax
In India, property tax is levied on "real property," which includes land and improvements on it, with the government valuing each property and charging the tax in proportion to its monetary value. The municipality of a certain area is responsible for this assessment and determining the property tax, which can be paid annually or semi-annually.This tax revenue is utilized to improve local amenities such as road repairs, park and school maintenance, and so on. Property taxes range from one location to the next, as well as between cities and municipalities.