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Property Tax in Chennai: Rates, Rules & Payment

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Property Tax in Chennai

It is not just about owning a property, but with it comes the responsibility of maintaining the property, literally and legally. As an owner, you need to pay property taxes every year before a deadline to continue enjoying your hard-earned asset. However, the amount of tax liability differs with the area of your property, the location, the urban or semi-urban area and the percentage determined by the local, civic and municipal authorities. For instance, if you own a house in Chennai, you are financially and legally obligated to pay property tax in Chennai, failing which you would be penalised on the assessment amount.

Side by side, it is also important to invest in a comprehensive property insurance plan that will safeguard all your possessions, starting from the house structure to the expensive belongings within it. Dealing with uncertainty can be daunting, more so if it involves your family and your safe abode. So, a home insurance plan for your building or apartment is as vital as a life insurance plan for your loved ones.

Corporation Property Tax in Chennai

As per the Chennai Municipal Corporation, the city is divided into 15 zonal divisions. The properties in these zones are broadly categorised into 2 types: Residential and Non-residential. Non-residential properties include shops, malls, offices, theatres, small businesses, etc. The rest all come under residential properties. The Chennai City Municipal Corporation Act 1919, one of the oldest municipalities established in 1688, mandates that all properties are required to be assessed together with the plot and the nearby areas they occupy. An estimated amount of gross annual rent on the said property is also added to its annual value. Moreover, property tax in Chennai is entitled to online payment exemption if any asset is not occupied for 30 days or more continuously.

Document List for Payment of Property Tax in Chennai

These documents should be kept handy while paying property tax in Chennai, be it online or offline :

1. Sale Deed or Title Deed:

This is the proof of your ownership and is more vital if the property is new or has recently changed hands with the transfer of ownership by sale or by inheritance.

2. Approved Building Plan:

A copy of the building plan which had been approved by the municipality needs to be submitted, especially if the property is newly constructed or has been altered.

3. Occupancy Certificate:

This can be issued by any local authority in your area of residence for the new apartment buildings. It proves that the property is not lying vacant.

4. Property Tax Receipt and Last Paid Water Tax Receipt:

The most recent property tax receipt is required to prove no dues pending in earlier payments. The water tax receipt, if applicable, is required to link your property with municipality services.

5. Proof of Address:

To further verify ownership details, a government-issued document like an Aadhaar, voter ID, or passport is required.

6. Property Tax Assessment Form:

This can be obtained online or from the municipality office and needs to be filled with details of the size of the property, type and category, address, number of floors, etc.

7. PID or Property Identification Number (PID):

This is a unique number assigned to your property by the Chennai municipality to track tax records. This number can be found on the earlier tax receipts generated post-payment.

Are You Eligible to Pay Chennai Property Tax?

The two basic criteria for tax payment eligibility include ownership and usage of the property :

1. Types of ownership of property:

Property owners, whether individuals or entities, within Chennai city limits are liable to pay property tax on residential, commercial, or industrial assets.

2. Vacant or Occupied Properties:

Although the tax rate varies as per the occupancy clause, the property owner is liable to pay taxes whether he resides within the premises or not.

3. Registered Property:

Only a legally registered property of Chennai Municipality with a valid Sale Deed or Title Deed as proof of ownership can be taxed.

4. Building and Land Area:

Both the built-up area and the land area the building occupies are considered while calculating the total property tax of the asset. The rates applied are different for both.

Calculating Property Tax in Chennai

The calculation is simple once you know the basic range per square foot and the type of property for which you want to make the payment.

The annual property tax can then be manually calculated with the below-mentioned formula :

Property Tax = Annual Rental Value (ARV) + Plinth Area x Basic rate per sq. ft. (Monthly Rental Value or MRV)

For example,

Plinth Area = 1000 sq.ft. (Total built-up area with walls)

Basic rate = Re.1 / sq.ft.

Depreciation of Land: @ 10 %

Depreciation of Building: @ 10%

MRV = 1000x1 = Rs. 1000 sq.ft.

ARV = 1000x12= Rs.12,000

Adjusted ARV with Land Value = Rs.12,000 - (10%x Rs. 12000)

= Rs. 12,000- Rs. 1,200

= Rs.10,800

In addition, add 10% for building depreciation,

10% x Rs.10,800 = Rs.1,080

Depreciated value = Rs.10,800- Rs.1080

= Rs.9,720

Hence, the Annual Value of the Land + Building = Rs. 9,720+ Rs.1,200

= Rs.10,920

For half-yearly tax calculation, a percentage of Annual Value can be calculated from the following figures as listed below :

You can resort to the online calculator provided on the website of Chennai Municipality. Simply click on the “Property tax calculator “ tab under “ Property Tax Payment”. Select the correct zone ward and street number along with other required details like tenancy, number of floors and owners. You can then submit by clicking on “Calculate Demand” to check the amount you are liable to pay.

Online Payment of Property Tax in Chennai

You can now follow these easy steps to pay your property taxes online from the comfort of your home :

Step 1:

Check out the official web page of Chennai Municipal Corporation and go to the “Civic Services” tab on the homepage.

Step 2:

Choose the “Property Tax” option from the list, and it will take you to the next page with a list of options like “Property Tax Rules”, “Property tax Status”, “Register Phone No,” etc. From this list, opt for “Property Tax Online Payment”.

Step 3:

Clicking the above button will take you to the next page, where you will need to fill in the details like the zone number, division number, identification number, bill number, etc. For convenience and error-free transactions, keep your earlier bill receipt to input all correct information.

Step 4:

Once you carefully complete all the required fields in the online form, hit the “Submit” button to go to the pending tax details page.

Step 5:

Once you have checked the amount, click the “Pay Online” tab, which will then take you to the final payment page.

Step 6:

You can make payments by Debit Card, Credit Card, UPI and even by net banking.

Step 7:

After payment is successful, download the transaction receipt as proof of payment.

Due Dates, Penalties and Rebates

There are two due dates offered to the taxpayers so that if one is missed, there is still time for you to make a payment without any penalties. You can pay your property tax in Chennai twice by the 31st of March or by the 31st of September.

Considerable rebates in taxation are also considered to encourage payments depending on the type of property. You can avail yourself of 10%, 20% and 25% rebates on the monthly rental value for owner-occupied commercial areas, owner-occupied residential buildings and semi-permanent buildings, respectively.

Moreover, a yearly depreciation of 1 % is also provided for properties that are 4 years old, till a maximum rebate of 25%.

If payment is not made within the deadline, a 2% penalty on the assessment value will be imposed on all defaulters after a 15-day grace period, regardless of any offers.

FAQs

1. How do you calculate the property tax in Chennai online?

You can go for online calculation of the property tax by clicking on “property tax calculator” which generates the demand showing the pending dues of the taxpayer.

2. What if the Property Tax is not paid on time?

If you miss payments, there are penalties and interest charges that are levied. In case of non-payment for extended periods, the municipality might take legal action and seize the property.

3. What is Namma Chennai App?

You can check your property tax dues, make payments and download receipts from this app.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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