The Property Tax Environment of Banaglore
To fund various public interest projects, the Government needs to raise finance. It does so through many channels but one of the main sources is by imposing taxes on the citizens. And one stream of taxation revenue is via property tax. The people who own the land are required by the State to pay annual tax for it, which the State then uses to power public development works. Our focus for now, is going to be the Bangalore property tax environment and how to navigate it.
Property Tax Utility
As already stated, the State needs funds to breathe life in to its various public works. The revenue obtained from property taxes is likewise used by the State. They distribute these down the channel to various municipalities within its borders so that projects of public interest like infrastructure development, public parks, schools etc. can be developed to improve the quality of life of its citizens
Type of Properties That Incur Tax
The authority for collection of Bangalore property tax is Bruhat Bangalore Mahanagara Palike (BBMP) and they collect manually as well as give people the option to pay BBMP property tax online. All autonomous buildings in Bangalore fall under the tax paying category and include places like godowns, flats and apartments whether residential or commercial, empty plots and shops.
What is the BBMP
The BBMP or Bruhat Bangalore Mahanagara Palike, is a tax collecting body of the City of Bangalore, and it is the place where residents of the city go to submit their obligatory dues or their taxes. The authority has its own measuring scale for the amount of tax to be levied on properties in different areas. This methodology is the Unit Area Value or UAV which is derived by predicting returns from land and property of different localities. The influencing factors are the way property is being utilized and where it is located. Property tax online payment is automatic once you input the values but even so it’s worth taking an understanding about. You take the rate that applies to the place your property is located in (Unit) and multiply it with area of your property (Area) and then multiply that result with the prevalent tax rate to get the value of property tax payable (Value). And you have your UAV!
Be warned that there is no fixed property tax rate though because it changes depending on the zone your property is placed in. There are six value zones and their values are determined and publicized by the Department of Stamps and Registration. So, you know where to get the Unit part of the UAV equation.
Paying the BBMP Property Tax Online
The deadline for depositing Bangalore property tax with the BBMP is within one month of the end of the year applicable for property tax payments. And the time begins in April of a year and ends on May of the year next making the deadline 30th of April of the proceeding fiscal year for property tax. The BBMP gives you a 5% refund if you deposit your whole tax amount in one go. On the other hand, payment beyond the due date can have you facing charges of 2% per every month of delay. You can, of course, take the middle road and pay the amount due in installments within the due date as well. That way you won’t have a liquidity crisis just paying property taxes!
- The manual method where you go totally old school and fill up a form and submit that to BBMP accompanied by a demand draft or cheque for the amount due.
- Property tax online payment where the taxpayer only must contend with an electronic form and money is transferred through debit/credit payment or online bank transfer. The BBMP property tax online system is most convenient and hassle free.
Banks that are authorized to collect BBMP property tax online include the following:
- Indian Overseas Bank
- ING Vysya Bank
- Canara Bank
- HDFC Bank
- Yes Bank
- Indusland Bank
- Corporation Bank
- Kotak Mahindra Bank
- IDBI Bank
Important Forms You’ll Require
There are six forms which address different circumstances that you encounter when dealing with Bangalore property tax. Developing an understanding for forms I, II, III, IV, V & IV will help you to be better prepared when you go for filling in forms and their subsequent submission.
- Form I
If your property has a Property Identification Number (PID) i.e. the exact location of the property from the ward no., street no., down to the plot no., which is the ideal situation, then this is the relevant form you require.
- Form II
However, if you only have the Katha number but not the PID then you will use this form. The Katha number also has similar though not exactly the same details as the PID about the property.
- Form III
When you are unaware of both the PID number and the Katha number of the property you intend to pay tax for, then this form is used.
- Form IV
When from one year to the next year there are no changes to property specifications then this form is used. It’s a white form where details such as size variation of property due to any reason or change of status are enquired upon.
- Form V
This blue form is for when there have been changes made to your property. It is also applicable when the property goes from under construction to ready-to-use.
- Form VI
In case the property has been allowed relief from paying Bangalore property tax there is still a service charge that needs to be paid to the authorities. This form deals with the service charge of tax-exempted properties.
We will now demonstrate, step-wise, how to calculate and pay BBMP property tax online
Step 1: First and foremostly, you should have on hand the total constructed area of your property. You should have it on official documents but alternatively it can be easily measured.
Step 2: Now find out from official sources, as mentioned previously, the value per unit area that is applicable to the area your property is located in.
Step 3: With those 2 figures in your hand, you can do a quick multiplication of area with value per unit area multiplied by 10 (for 10 months).
Step 4: In case you are entitled to a refund then the value obtained in step 3 will be lessened by the amount of the refund and you will be left with the total annual value of the property.
Step 5: 1/5th of the value obtained in step 4 or 20% of annual value of property will be the property tax
Step 6: The leviable cess is 24% of the property tax. So, multiply the value in step 5 with 24%.
Step 7: When you add the cess and the property tax together you get the amount actually payable to BBMP in lieu of property tax charges.
Step 8: And if you pay this amount before the due date, then a refund of 5% is granted to you! So, you should deduct that from the amount in step 7 and you are all set to make the payment of your property tax for the year!
But after successfully calculating the amount of tax due you may also want to make property tax online payment. Next, we will elaborate the way for that:
Property Tax Online Payment
Step 1: Open your browser and go to the BBMP official site. You will have to login before anything gets done.
Step 2: You then click on ‘Fetch’ button. But there is nothing to fetch unless you put in a SAS Base Application number. Unsure of that? Well go to the ‘Renewal Application Number’ and put in last year’s application number. If you are not sure of that either, you should enter the PID number and that will get you results.
Step 3: When you get the right SAS or PID number, the property owners name is given on the screen. If you have checked and the details are correct, go ahead and click ‘confirm’.
Step 4: The site takes you to another page where it shows you the details and specifications of the property. If you feel anything needs correction or updating, then you mark the box next to it and then click ‘Proceed’.
Step 5: If you had checked any boxes to make changes, then Form V will appear on which you can enter the correct particulars for updating of records. When you click ‘Proceed to Next Step’, you are brought to the page giving all the specifications used to arrive at the tax amount payable.
Step 6: On the next page, you are shown all the auto-filled in information that you fed in at various stages of the online process. If this page is left unmarked, the information will become un-editable because it will have been submitted. You can only change your mobile number afterwards.
Step 7: All that’s left to do is make the property tax online payment. Options are debit card/credit card, e-wallet or internet banking. You can also go to the bank, pay there and get a paid challan and deposit the paid challan at BBMP.
Step 8: If you paid online, you just need the receipt number and you’re good to go. A time duration of 24 hours is intimated for a receipt to be generated on the online portal.
Step 9: Make sure to download or print the receipt once it appears. You will need it for future references!