Property Tax - Part 2

Understanding earnings from house property may be problematic. To make it easy, here are some things to hold in mind:

Only the Net Annual Value of your house(s) is considered for taxation. Net Annual Value is arrived at when you deduct the municipal taxes paid at the belongings from the gross annual price of the residence. For instance, if you are receiving Rs.1.2 lakh as hire yearly on a residence you have got let out, and you're paying Rs.Forty,000 as municipal taxes, then the Net Annual Value of your house is Rs.Eighty,000, and you need to pay tax only on this amount.

If your own home(s) is lying vacant for any duration at some stage in the economic year due to loss of tenants, you have to remember best the earnings acquired as hire and now not compute it against the complete 365 days. For example, if a house yielding Rs.17,000 as hire is vacant for four months of the fiscal year, then the gross value of the house can be Rs.1,36,000 (Rs.17,000 * eight). Tax payable on this earnings will be calculated after deducting the municipal tax amount paid and the usual deduction of 30%.

If your home(s) is lying vacant and no longer supplying you with any profits, but you are paying municipal taxes, you could offset this loss in opposition to income from different assets – consisting of your profits or rent from every other assets – throughout the equal fiscal. If you're not able to offset the loss within the identical year, you could deliver ahead this loss for up to 8 years.

Property Tax Online

Property Tax in India can be paid on-line. Each country or municipal has its personal internet site for on-line charge of property tax, those web sites require the assessee to grant their Property Tax number or Khatha variety or the sales survey wide variety. Assesses ought to pay attention to the subsequent whilst submitting their belongings taxes on-line:

If the property tax return for the previous yr has no longer been filed, assets tax for the modern year will be accompanied with the return and dues, if any for the preceding years.

Additional Depreciation can not be claimed for the year 2017-18 and 2018-19 as depreciation may be claimed as soon as in a block duration, i.E. From 2016-17 to 2018-19

If revised return for any 12 months has been filed, then the return for the present day year will be on the idea of revised return filed.

In case if any tax was paid in advance and after adjusting for the tax for the previous years, if there is nevertheless a balance, it will be paid back through Cheque or DD after due verification.

If belongings tax is paid in two instalments for the current yr, then same form is used for second instalment.

5% rebate on general property tax to be paid will be availed, in case you are paying full amount in one instalment.

If you're making price for preceding years (arrears charge), fee will be made after generating challan for every preceding year.

Right now you can make the fee closer to your private home tax if you already paid the assets tax at least once, with the aid of the use of your SAS BASE APPLICATION NUMBER or PID NUMBER. If you're paying the property tax for the primary time kindly wait for a while.

If you are a defaulter, device calculate the interest routinely for the defaulted duration at the price of 2% consistent with month.

If you're paying thru DD or CASH, receipt may be generated immediately. But for the price thru cheques, receipt can be generated handiest after the realization of the cheque amount.

How to Pay Property Tax Online:

The net has made a massive effect on how the arena functions, beginning new doors and simplifying lives. Paying belongings tax turned into taken into consideration a massive hassle inside the past, but those days are lengthy long past, thanks to the choice of paying assets tax online. Most municipal corporations provide the option of paying property tax on line, streamlining the manner and saving precious time.

Property Tax Calculation:

Property tax in India depends at the place of a property in question, with taxes various from kingdom to country. Different civic corporations use exclusive techniques to calculate tax, but the general evaluate of such calculations stays the identical and is explained underneath.

An assessment of the belongings is first executed by using determining the place it's miles in, occupancy status (whether it is self-occupied or rented out), kind of property (residential, industrial or land), facilities provided (vehicle park, rainwater harvesting, store, and many others.), yr of construction, kind of production (multi-storied/ unmarried ground/ pukka or kutcha structure, etc.), Floor area index and carpeted square place of the property.

Once these parameters are determined the civic organization can use a method it deems suit to calculate tax. Different corporations use unique system.

The formulation used by Mumbai Municipal Corporation is given beneath:

Property tax = base value × built-up region × Age issue × type of constructing × class of use × ground element.

The tax on a property will range consistent with the factors stated above and can be easily computed on line, thru the legitimate website of the municipal business enterprise concerned.

Interest on Property Tax:

Late payments in the direction of property tax can appeal to a first-class, normally equal to a positive percent of the amount due. This interest varies from state to nation, with some states choosing to waive off such hobby and others charging prices from 5% to 20%, depending on their individual guidelines.

For Example:

Some states waived off penalties on assets tax while Bangalore decided to minimize interest for late bills from 20% to 10%, in a bid to get extra human beings to pay their dues.

Section 80C and Property Tax:

Individuals who purchase a new house can declare deductions under phase 80c of the Income Tax Act. Under this clause, deductions can be claimed for stamp obligation and registration charges, that may upload as much as round 10% of the whole price of a residence. Deductions claimed underneath this phase are issue to the condition that they do now not exceed Rs 1.Five lakh.

Individuals can also declare a deduction toward every other rate at some point of the system of transfer of property. Homeowners ought to understand that that is relevant best for brand spanking new residential residences.

Capital Gains Tax on Property:

Capital profits tax refers to the tax levied at the profit that's the final results of a belongings sale. Capital profits tax can be a major supply of wealth drain if no longer treated smartly. A simple manner to handle this is to purchase a brand new house from the proceeds of a belongings sale, retaining in thoughts that such assets have to be bought within  years of sale. Proceeds from a assets sale also can be used to construct a residence, ensuring that capital gains tax on assets doesn’t come to be too taxing.