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Full RM + FRM support Instant alerts & premium filters Rent negotiation & relocation helpIndian Property Tax Explained: Calculation, Payment Process, and Important Deadlines for 2025
Published : March 25, 2025, 6:24 PM
Updated : March 25, 2025, 6:24 PM
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The Indian tax laws can be a bit confusing. Some change often while others are very old and still followed diligently. How can one keep a tab on all the laws in such a situation? Don’t worry we’ve got you. This article will give you the most simple introduction to Indian Property Tax so your life can get a bit easier. So shall we get started?
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The Property Tax in India is used to maintain roads, lighting, schools, sewage, and other public services. Every year, the municipal corporation collects the tax, which is calculated depending on the size, location, usage, and property type. Property owners can pay the tax online via the official website or offline through registered municipal offices.
Understanding Indian Property Tax in 2025
Paying property tax is important to maintaining public services. Whether you own a residential or commercial property, calculating the tax and paying it on time is important. Paying property tax on time will save you from fines or legal actions.
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Property under the central government, including vacant properties, is either exempt or changed at lower rates. Some cities also apply Vacant Land Tax (VLT), which is calculated based on the area and location of the property. Each state and municipal body has different rules and regulations, so check the official website to pay the taxes.
How to pay tax on property in India online?
As we mentioned earlier, this article is a simple introduction to Indian property tax. And that is why, we’ll walk you through all the small and big processes you need to do as a property owner in India. If you are a first-time property taxpayer and have no clue how to pay taxes online, don’t worry. Below is the step-by-step process of paying the tax.
- Step 1: Visit the official municipal corporation website. For example (BBMP) Bangalore, (BMC), Mumbai, (GHMC), Hyderabad and more.
- Step 2: Choose the tab that indicates “Property Tax” and “Online Payment” options on the website
- Step 3: Choose the property tax online application form from the respective official website under which the property falls
- Step 4: Fill in the required details like property ID, owner details, and type of property
- Step 5: Select the assessment year you want to pay your tax for or clear dues, if any
- Step 6: Choose the preferred options and pay using credit/debit cards, net banking, UPI options
- Step 7: Now keep a copy of the proof of payment to save yourself from any further legal actions
How to pay tax on property in India offline?
People can also pay their property tax offline in India through designated municipal offices and authorized banks. Below are the steps:
- They need to visit the specific counter that is responsible for property tax.
- Collect the form from the counter
- Fill in the required details
- Calculate the tax
- Make the payment
- Collect the payment receipt for proof
What are the different methods of calculating India Property Tax?
In India, the property tax is calculated using different methods based on the municipal authorities. Generally, there are three ways in which the property tax is calculated:
1. Capital Value System (CVS):
The property tax is calculated based on the property’s total market value. The local administration and government body determine market value based on the locality. Mumbai is the prime example of a place where this property tax system is followed.
2. Annual Rental Value Method (RVS):
Under this method, the property's rental value is first calculated, considering the locality type, size, landmarks, and locations. Finally, the tax payment is calculated on the property's rental value. Hyderabad and Chennai are examples of this system.
3. Unit Area Value System (UAS):
Under this method, the tax is calculated based on the per-unit price of the property’s built-up area. The price per unit is calculated depending on factors like location, land price, and usage. This method is used in Bengaluru, Delhi, and Kolkata.
How to Download the Property Tax receipt or Challan online?
It is important to download the receipt or Challan for all online payments. It is also advisable to keep your Challan for at least 5 years to avoid any disagreement and legal actions from the municipal corporation. Below are step-by-step processes to download your property tax challan
- Visit the official website of the municipal corporation under which your property falls
- Login with OTP, which you will receive on the registered mobile number, to check your account
- All the details of the property tax payment will be displayed
- Click on the download button to download your receipt on your device
What is the penalty & Interest on Late Payments?
Paying your taxes on time is very important to protect yourself from penalties or additional charges. The exact percentage depends on the municipal corporation under which your property falls. The interest varies from state to state but ranges from 5% to 20%, depending on the state or municipality. These charges are added to the principal amount of the property tax. The interest keeps adding until the full amount is paid.
How Property Tax is Calculated in 2025
Property is vastly different in each region of the country, so the government puts local bodies, such as Municipal Corporations in charge of the local tax.
- The state decides the amount to be paid based on various factors such as:
- The basic value of the property (this forms the base amount of the tax)
- The size of the property
- The location of the property
- The occupancy status of the property
- The covered area and quality of construction of the property
Steps To Calculate Your Property Tax:
- Step 1: Find the Annual Value of your Property. Depending on your local tax system, this is usually based on the rental value, market value, or area size of your property.
- Step 2: Check the property tax rate in your area, which is generally provided by your local municipality.
- Step 3: Use the formula:
- Property Tax = (Annual Value of Property) x (Tax Rate): Multiply the annual value of your property by the tax rate to get the basic tax amount.
- Step 4: Look for any exemptions or rebates you qualify for (e.g., senior citizen discounts, property type deductions).
- Step 5: Subtract any exemptions or rebates from the basic tax amount to get the final property tax payable.
Explore Property Tax Payment Options City-Wise in India
How NoBroker Can Help with Legal Services?
If you plan to buy a new home, NoBroker can help you find the perfect one. Click below to start your search. Don't forget that paying your property tax is required. Your local authorities can charge you fines or take legal action if you don't pay. Pay your property tax on time to avoid any issues and protect your home.
Frequently Asked Questions
Ans: The property tax is paid annually. Depending on the designated municipal corporation, you can also pay the tax in two instalments.
Ans: Yes, you can pay the property tax offline in India through designated municipal offices or authorized banks.
Ans: Yes, the property tax can be deducted from income tax in India under certain conditions. Under rental property tax, the entire property tax paid can be deducted from rental income under Section 24. For business proposes, the tax paid is claimed as a business expense under Section 37(1). This is only applicable if the tax is paid during the financial year.
Ans: As per the Simple Introduction to Indian Property Tax, late payment comes with penalties and interest changes. Interest rates vary according to different municipality policies but generally range from 5% to 20%.
Ans: Everyone who owns a property in India has to pay property tax. It is also advisable to pay it on time to avoid penalties.
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