Know all about Property Tax in Chennai
Compared to other cities in the country, Chennai has the most user-friendly property tax collection system. The Corporation of Chennai facilitates its citizens with a property tax collection system that makes extensive use of latest developments in the field of web and information technology, thus allowing tax payers to choose between online and offline mode of payment, depending on their preference.
The following guide will help you get an insight into the whole property tax collection system in Chennai.
Property Tax Assessment Method
The Corporation of Chennai has adopted the concept of reasonable letting value (RLV) for calculating the annual rental value, which in turn is used to calculate the half yearly property tax for the properties in this city. Here, the property tax is assessed using factors such as plinth area, basic rental value in that street, usage (residential or non-residential), nature of occupancy (owner or tenant) and age of the building.
Online Tax Calculator: The online property tax calculator available on the website of the Corporation of Chennai is undoubtedly the most reliable and accurate way to calculate property tax. However, if tax payers feel that there is any discrepancy, then there is an option to submit complains to the Revenue Officer. He can be reached at phone numbers: 044-25383614/25384510 Extension number #381.
Manual Calculation : Firstly, the monthly rental value is estimated using the plinth area and standard rental value in the specific locality or street. The Annual Value is determined by multiplying the monthly rental value with 10.92 (Common factor). After arriving at the annual value, the half-yearly tax is calculated as a percentage of annual value, and varies depending on the grade of the annual value. The half-yearly tax is calculated as 6.62% of the annual value of Rs.1.00 to Rs.500, 9.92% for properties with annual value of Rs.501 to Rs.1000, 11.02% for properties with annual value of Rs.1001 to 5000 and 12.40% for properties with annual value of Rs.5001 and above.
Given below is an example of calculation of property tax for a residential property in Chennai:
Let’s say the property lies in Binjala Subramaniam Street at T. Nagar where the basic rate is Rs.1.50 per sq.ft. Also assume that the plinth area of the property is 500 sq.ft for ground floor and 500 sq.ft for first floor. Say the ground floor is terraced and that the first floor has an asbestos roof. The ground floor is occupied by the owner and the first floor is tenanted. The building is 10 years old. Here goes the calculation:
For the ground floor:
Monthly Rental Value = 500 sq.ft × Rs. 1.50 per sq.ft =Rs.750
Owner Occupation Discount of 25% = Rs.187.50
Rental Value after Discount = Rs.562.50
Age Depreciation 10% (1% for each year) = Rs.56.25
So the total rental value for ground floor = Rs.506.25
For the first floor:
Monthly Rental Value = 500 sq.ft × Rs. 1.50 per sq.ft =Rs.750
20% discount for asbestos roof = Rs.150.00
Rental value after discount = Rs.600.00
Age Depreciation 10% (1% for each year) = Rs.60.00
Rental Value for the first floor = Rs.540.00
Rental value of the entire building = rental value for first floor + rental value for ground floor ie. Rs.540.00 + Rs.506.25 = Rs.1045.25
Therefore, total rental value =Rs.1045 × 10.92 = Rs.11411.00
And half-yearly tax = Rs.11411.00 × 12.40% = Rs.1415.00
Where to pay the Property Tax?
Online Method: As mentioned earlier, the Corporation of Chennai facilitates tax payers with both online as well as offline payment options. Very simply, you can pay your property tax online.
Manual Payment: You can also pay the property tax manually at the Office of the Revenue Officer, Office of the Asst. Revenue or Officer of the Zonal Offices I to XV. The forms are available at all these offices and you have to take Form No.6 for new buildings, Form No.7 for buildings with additional construction and Form No.8 for sub division of buildings. Rs.100 is charged for Form No. 8. All these offices are located at Corporation of Chennai, Ripon Building, Chennai – 600003.
You can also pay at any of the zonal offices of the corporation and at any of the bank branches of Axis Bank, Canara Bank, City Union Bank, HDFC Bank, ICICI Bank, IDBI Bank and Indian Overseas Bank as the Corporation of Chennai has a tie-up with these banks for payment of property tax. You can also use the net banking facility and ATM facility of these banks to pay property tax in Chennai. You will have to provide the officials at the bank counters with your property tax numbers. You can also pay using credit cards or by subscribing to the services of portals such as Bill Junction and Bill Desk. If you want to enroll to the Electronic Clearing Scheme (ECS), then you can do so by submitting a mandate form. You can make manual payment of property tax too.
When to pay the Property Tax?
The last date for receipt of payment of property tax is usually 31st of March and 31st of September every year; However, it can vary from year to year and it is supposed to be paid within 15 days of the commencement of the half year.
Consequences in case of non-payment or delay of Property Tax
In the case of a delay, the Corporation of Chennai charges a penalty of 1% per month which can accumulate to 12% if the payment is not done for an entire year.
