While purchasing property or transferring ownership, it is essential to comply with all the legal formalities. One of these is the payment of property tax regularly and on time by the property owner in whose name it is registered. Let us look into the details of property tax and the assessment, calculation, implementation, and payment method of South Delhi Municipal Corporation’s (SDMC) property tax. SDMC provides various services to the citizens, and in return, it imposes property tax to cover these expenses.
What is Property Tax?
Property tax is also known as municipal tax or house tax. It is imposed on immovable assets or property like houses, rental offices, land, etc. The property owner needs to pay this tax annually. The local municipal authority is responsible for imposing, assessing, and collecting property tax. Property tax differs from state to state and region to region. It covers commercial and residential buildings. It is usually higher for commercial buildings. Thus, even the person residing in South Delhi Municipal Corporation is required to pay property tax to the authorities regardless of whether it is used by the owner or rented.
SDMC is divided into zones according to which property tax rates are decided: Najafgarh, West Zone, Central Zone, and South Zone.
Calculation of SDMC Property Tax
The unit area system is adopted by South Delhi Municipal Corporation to calculate the SDMC property tax. The formula applied to calculate the payable tax amount by the property owner is highlighted below:-
Property tax = The annual value of property x current rate of tax
These terminologies are described below:-
1) The annual value of the property:
This is calculated by SDMC by a formula, which is as follows:-
The annual value of property = Area covered by the property x Unit area value per sure meter x Occupancy factor x age factor x structure factor x use factor x flat factor
Each terminology used in the above-mentioned formula may be described as. ● Area covered by the property- The total floor area of a property. Unit area value is calculated per square meter.
- Occupancy Factor- The property is self-occupied by the owner or rented out. ● Age Factor- Newer properties are charged a higher tax rate than older ones. It ranges between 0.5 to 1 on a scale.
- Structure Factor- It is allotted based on the construction of the property. ● Flat Factor- This is calculated based o the total area covered by the flat. ● Use Factor- Factor assigned to a property based on its usage.
2) The Current Rate of tax:
While calculating the SDMC property tax rate, the SDMC is divided into eight categories depending on the valuation of properties in various localities within it. The category ranges from A to H. The rate of each of these categories varies.
Mentioned below are the highlights of the difference between various categories as of 2021- 2022:
Residential Property Tax Rate
|Property Category||SDMC Property Tax Rate (in %)|
Commercial Property Tax Rate
|Category of Property||SDMC Property Tax Rate- Industrial Properties (%)|
How to Pay SDMC Property Tax?
SDMC provides the facility to pay property tax through offline and online methods.
Offline Method of Tax Payment
Taxpayers in South Delhi may visit ITZ cash counters to pay their taxes. However, keep the following points in mind before visiting the cash counters:
- Payment may be done through debit or credit card, cash, demand draft, or cheque. ● Tax payment may also be done by visiting a nearby branch of Axis Bank or HDFC bank.
- While paying the property tax, ensure that the bank statements are addressed to “Commissioner, South Delhi Municipal Corporation”.
Remember to carry the following documents while paying the property tax: ● Aadhar card
- Property tax statement
- Property ID (a unique number of property)
- Old Property ID (the previous number of properties through which taxes were paid in the past)
- SDMC property tax challan of the previous years.
After the payment procedure is complete, keep the SDMC property tax challan safe for future reference.
The Online Method Of Tax Payment:
This method involves the following steps:-
- Step 1- Visit the official website of the Municipal Corporation of South Delhi or Municipal Corporation of Delhi (MCD)
- Step 2- Choose from SDMC, WDMC, EDMC, or NDMC (according to the south, west, east, or north Delhi corporations).
- Step 3- Register with the website by signing up or logging into the portal. ● Step 4- After logging in, pay the property tax. There are three options displayed now: ‘Apply for new UPIC,’ ‘Register new property for tax payment,’ and ‘Search property on UPIC.’
- If you have the Unique Property Identification Number, select the ‘Search property on UPIC’ option. However, if you do not have a UPIC, then register your property through ‘Apply for new UPIC’ and ‘Register new property for tax payment.’
- Step 5- On submitting the UPIC on this portal, a list of properties with their details appears. Find the property for which tax is to be paid.
- Step 6- Choose the ‘Action’ option against each property and then click on the ‘select property to pay tax’ option.
- Step 7- Complete the payment of property tax through debit/credit card and net banking.
- Step 8- Generate challan and download the tax receipt as a pdf.
You may also pay your SDMC Property taxes through a mobile application. Rebates on Property Tax
- 15% rebate for early payment, i.e., during the first quarter of a financial year ● 30% rebate to senior citizens, women on a single property of up to 200 square meters, ex-servicemen, and physically challenged people
- 10% rebate on the annual value of CGHS/DDA flats of 100 square meters ● 20% rebate to owners of group housing flats who pay property tax before June 30 of the financial year
Certain properties also lie exempted from SDMC Property Tax, like agricultural land, property owned by families of martyred policemen or paramilitary forces, buildings used for charitable purposes or religious purposes, etc. If falling into the category of tax payment, it is advised to comply with the terms and conditions and fulfill the legal formalities to avoid grave consequences.