Applicable property tax rates and payment process in Kolkata
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Applicable property tax rates and payment process in Kolkata

In our endeavour to create awareness amongst property or home buyers, we have regularly shared details, in a simplified manner, about complex subjects such as the property tax. It is highly recommended that you read our previous posts to clarify any doubts related to property tax.

 

In this post, we are sharing the details of property tax as levied by Kolkata Municipal Corporation (KMC) and process of payment that property and home buyers can follow to paying the property tax dues.

 

In simple terms, property tax is defined as the mandatory charge levied by the local state government on annual basis. This type of tax is paid by the owner of property to the designated municipal corporation of the district in which the property is located. The tax collected by municipal authorities is used for the purpose of carrying out developmental work like maintenance of parks and roads. The tax also is used for providing civic services including drainage and sewerage management, electrification of roads, etc.

 

It was in December 2016, the state government of West Bengal passed the bill empowering the Kolkata Municipal Corporation (KMC) for simplifying the assessment and collection of property tax. As per the bill, KMC was given powers to assess the owner’s property tax liability for issuing notices to property owners for making timely payments of the mandatory tax. KMC was also authorised to penalise the defaulting and errant home owners as per the provisions of the law.

 

How is the property tax calculated by the KMC?

 

The KMC follows the Unit Area Assessment (UAA) method to calculate the property tax liability of each property located in Kolkata. The property tax calculation and payment system has been automated and the owners also have the flexibility of calculating the property tax liability for a particular year on their own.

 

As per the specified guidelines, Kolkata city is divided into 293 blocks and 7 categories based on type of infrastructure and market value of the property. The general formula used by KMC for calculating the annual property tax liability is as below:

 

  • Property Tax = Base Unit Area X Covered space or Land area X Location Factor X Usage Factor X Age Factor X Structure Factor X Occupancy Factor X Tax Rate (including the Howrah Bridge Tax, if applicable)

 

Type of Property

Tax Rate (In %)

Properties in Underdeveloped Slums

6

Properties in Developed Slums

8

Government Properties

10

Properties of Value more than Rs. 30,000/-

15

Other Properties

20

 

Note: The formula mentioned above appears complex and hence it is advisable to consult a qualified property tax professional for proper tax calculation and filing. Any error(s) committed by the owner of property while calculating self-assessment property tax is viewed as an attempt of tax evasion by the government authorities and may attracts penalties as per the provisions specified in the taxation law.

 

What is process of making property tax payment to KMC?

 

There are two modes of property tax payment that are allowed by KMC for properties that are located in Kolkata – Offline Tax Payment mode and Online Tax Payment mode. Let us have a quick look at both of them.

 

  1. Online Tax Payment Mode

Owners that are savvy with the online payment process can take the following steps to calculate and pay the property tax to KMC on their website:

  • Visit KMC official website – https://www.kmcgov.in/KMCPortal/jsp/KMCPortalHome1.jsp
  • On the left menu, look for Online Services option
  • Then go to Assessment Collection option
  • A new page will open, on which you need to select Make Online Payment
  • Once you click on Make Online Payment, you will get 3 options:
    • Current Demand
    • Outstanding Demand (Letter of Intimation, also called as LOI)
    • Fresh Supplementary
  • Select the correct option and a new page opens that will ask you to provide property tax related details like assessee number, contact number and email id.
  • Once you put these details, you will be taken to the payment gateway, where you can make payment using debit card, credit card or net banking.
  • On successful payment processing, online property tax payment receipt is generated. It is advisable to save the receipt carefully for future reference.

 

  1. Offline Tax Payment Mode

Owners who are not technology savvy and prefer making payments of tax via cheque or demand draft or cash, can use this method of payment. Following steps can be taken for payment of property tax:

  • Visit the local municipal corporation office
  • Take the tax payment form from the designated counter
  • Fill up the form completely and correctly
  • Submit the duly filled form to the processing clerk or representative
  • Handover the payment instrument along with the form – cheque or demand draft or cash
  • Collect the tax payment receipt as issued by the processing clerk or representative

 

Why it is important to take help from a qualified property tax expert?

 

For a common individual, calculating the property tax can be a very complicated and tedious task. Any error made in the self-assessment calculation by the owner will increase the risk of getting penalty notices once the error is detected by the municipal corporation. The reason is simple – any incorrect tax amount paid by the owner tantamount to tax evasion in the eyes of the taxation authorities. Hence, it becomes only pragmatic involve a competent property tax consultant for doing this difficult task for you as the owner. The property tax consultant will not only correctly calculate the tax liability but will also file the tax in compliance with the law.

 

As they say, it is always better that an expert handles the job and do it well. In case you are facing difficulties calculating your property tax liability then you may consult a competent property lawyer right away on the LegalKart platform.