BMC's Online Calculator Makes Property Tax Calculations Easy

With India taking rapid strides towards development, the government has decided to make life easier for indian citizens by introducing online calculation, payment and tax filing options. One such initiative has been the introduction of a user-friendly online calculator for property in India.

Benefits of online calculator

Not only does it make computing property tax simpler, but also gives the control in the hands of the citizens. The property tax bill has information pertaining to carpet area, type and age of the property. Now, you can cross-check the bill details with the online calculator and in case of any deviations, the ward office can rectify the mistakes. There is the additional benefit of being able to calculate the tax payable on outstanding bills as well.

Thanks to the online calculator, the taxpayer is now able to understand how the taxing system works. The calculator system shows the tax assessment based on different heads such as ward, zone, tenanted / self-occupied, property category, year of construction, etc.

Difference between previous calculations and modern day calculator

Earlier, the property tax calculations were made according to the rate based value system. This system would use the amount of rent collected from a given property in a year as the basis for calculating taxes. Going by this system, the Municipal Corporation was losing out on a lot of revenue through the artificially low property taxes issued by the Rent Control Board. This was especially true for over eight lakh tenants in South Mumbai.

However, with the new capital value based system, the revenue is expected to increase at least by Rs 150 crores from South Mumbai alone! This system uses the stamp duty ready-reckoner rate issued by the government to find out the value of the property based on different parameters. Since this rate is revised annually, the Brihanmumbai Municipal Corporation, the civic body of Mumbai, can arrive at a more realistic property value based tax amount than before.

How are the calculations done?

According to the rules set for the period 2010-2015, the capital value was calculated as the product of the base value, built-up area, use category, type of building, age, and floor factor of the property in India. Property tax, once fixed, would not be revised during a five year period. After 5 years, the hike would be restricted to 40%. Residential units with over 500 sq ft carpet area would pay twice as much as they previously paid, or the tax according to the new system, whichever is less. If the carpet area is less than 500 sq ft, they will pay as much as they paid before the new system was introduced.

Calculate Your Property Tax Here: https://prcvs.mcgm.gov.in/

Amendments in rule for 2015-2020

The BMC has revised its rules that are to come into effect from April 2015. According to this, the following changes have been incorporated:

There has been an increase in the fixed rates for properties falling under all categories.

The formula for calculation of capital value has been changed to include carpet area instead of the built-up area. The formula would now include a product of the carpet area and the ready-reckoner rate.

There has been a revision in the tax slabs which is expected to result in a 40% increase in property taxes.

The classification of properties has been brought down from 21 to six.

While it is true that being able to assess your tax liability is sure to give more control in the hands of the taxpayer, there is still a long way to go before the project is streamlined. Some of the drawbacks that were stated for this online calculator was that it functioned fully only while using the Internet Explorer. Another grievance stated was that the system was unable to take the load if many users logged in at the same time. However, things are definitely looking up!