Property Tax in India
The term ‘property’ stands for tangible real estate owned by a person. It includes houses, office places, rented out properties etc. Taxes are the primary source of income of the government and they determine the kind and amount of resources being available to the people. Property tax is recognised across the world as property is an asset. The tax is basically an annual amount which has to be paid to the government by the owner.
Property tax or house tax is a levy over the property (buildings and appurtenant land) which is imposed on the owner of the same. It is thus collected on residential, commercial and also industrial units along with units with mixed land use. There is no defined and comprehensive system of property taxation in India and it thus varies both among states and also among various municipalities within the states. The power to collect this tax is with the states and also the local bodies. Valuation method, rate slabs and procedures of collection are marked.
In India property is broadly divided into 4 categories which are useful in tax estimation. These are as follows:
- Land : Basic without any construction on it
- Improvements made to land: Constructions in form of buildings, godowns etc.
- Personal property: Other owned assets like vehicles (personal/commercial)
- Intangible property
Property tax in India is currently paid on ‘real property’ i.e. land and other improvements on the same. Tax is calculated by the government based on its value. The assessment is made by the municipality of the area concerned. It can be paid either on annual or semi-annual basis. It varies from place to place.