Taxes serve as one of the primary sources of revenue for the Government, enabling them to develop and maintain essential infrastructure and amenities like construction and maintenance of roads and parks, cleanliness of the locality, efficient drainage, etc.
There are certain taxes that are levied by the Government of India, like Goods and Services tax (GST), Income Tax, etc. Similarly, there are certain other taxes that are levied by the different states of the country. Property Tax is one such tax that is levied by the State Government and is payable by the residents of that state through a local body like the state municipality. This tax acts as revenue from real estate like vacant land, residential apartments, commercial complexes, warehouses and shops, owned by a resident.
As this tax is paid indirectly paid to the State Government through the relevant municipality, it has an effect on the method of computation and mode of payment. Therefore, if you own property in Bangalore, it is essential for you to have a thorough knowledge about these minute details, so that you are well aware of the Property Tax that you have to pay to your State Government.
If you own a property in Bangalore, you are liable to pay property tax to the state’s municipal body, known as Bruhat Bengaluru Mahanagara Palike (BBMP), payable every year.
The BBMP abides by the Unit Area Value (UAV) system, for computing the taxable amount towards property tax. The UAV is calculated based on estimated returns from the property, taking into consideration various factors like type and location of the property.
The property tax calculation is done by multiplying the area occupied by the property by the fixed rate of its per sq. ft. tax in a month (UNIT), which is again multiplied by the existing property tax rate (VALUE). The per sq. ft. tax rate is determined by the current value of the property, depending on its location. The jurisdiction of the BBMP is categorised under six value zones, as per the guidance value mentioned by the Department of Stamps and Registration.
The 6 forms for paying property taxes in Bangalore are:
Form I: Form I is applicable when the owner of the property has its PID (Property Identification Number), a dynamic identification number allocated to his/her property that comprises of detailed information related to the plot, road and ward of the property.
Form II: Form II is relevant when the property owner does not possess the PID but has a Katha number, the unique number of the Katha certificate issued for his/her property and includes all the essential details of the concerned property.
Form III: This form has to be submitted by a property owner who neither has the PID or the Khata number.
Form IV: Form IV is a white form that has to be submitted when there are no changes involved in the property information related to increase or decrease in the property size, or any alterations in statues.
Form V: Form V is a blue form that is required by owners whose property has undergone some changes like construction of another floor, demolition of the property, transition of the property from residential to non-residential or vice-versa, transition of its status from under-construction to constructed, etc.
Form VI: This is the form that is relevant for property owners who are eligible for tax exemptions from property tax. The service charge that has to be paid can be done through this form.
The property tax in Bengaluru for all properties – self-occupied, tenanted, vehicle parking, can be calculated using this formula:
Property tax (K) = (G – I)*20% + Cess (24% of property tax)
G - Gross unit area value, which is the result of A+B+C
I - G*D/100
A - Tenanted area of property rate of property per sq. ft. 10 months
B - Self-occupied area of property rate of property per sq. ft. 10 months
C - Vehicle parking area rate of vehicle parking area per sq. ft. 10 months
D - Depreciation percentage, based on the age of the property
The following steps break down the formula to simplify the property tax calculation.
Known the exact details of your property - built-up area, value per unit area and the depreciation
Multiply the value of the built-up area and the value of the unit area, and then multiply it by 10 (denoting 10 months)
Deduct the depreciation from this value to get the total annual value of the property.
Calculate 20% of the total annual value of the property to get property tax value
Calculate 24% of this property tax to get the cess amount
Add the property tax to this cess to arrive at the final payable property tax
The property owner will be able to avail a rebate of 5%, if he/she pays the property tax before the due date, that is, 30th April of the assessment year
Deduct 5% from the final value of property tax to get the discounted property tax amount
Let’s take a look at certain things you need to consider while calculating your property tax:
Built-up area should not include cars parked in verandas and open car parks. Areas occupied by cars parked in verandas and open car parks have to be deducted from the built-up area.
If you own a residential property that is neither self-occupied nor is rented out to the tenant, you can declare it as self-occupied and calculate the tax accordingly.
If the construction of your property gets completed after 1st October, the payable tax will be for half of the assessment year. In case of completion of construction before 1st October, the entire annual tax has to be paid.
Even if you have demolished a construction, you have to pay property tax for the vacant land.
The newly introduced cess for solid waste management will be applicable if there is a construction on your property and not if it is a vacant land.
Late payments are liable to an added interest of 2% per month over and above the annual interest rate of 24%.
The property tax can either be paid in its entirety once a year or it can be paid in two instalments payable half-yearly.
If you opt for paying the tax in 2 instalments, the relevant forms will have to be submitted twice.
Taxes amounting to up to INR 1,000 can be paid by cash. Taxes exceeding this amount will have to be paid through online platforms, credit/debit cards or demand drafts in favour of ‘Commissioner, Bruhat Bangalore Mahanagara Palike’.
Property Taxes in Bengaluru can be paid through two methods - online and offline.
Offline payment method for BBMP Property Tax:
Fill up all the forms with accurate information.
Submit them at BangaloreOne centre or an ARO office or specific banks that have been authorised for such services.
Taxes amounting to up to INR 1,000 can be paid by cash. Taxes exceeding this amount will have to be paid through online platforms, credit/debit cards or demand drafts in favour of ‘Commissioner, Bruhat Bangalore Mahanagara Palike’.
Following are the banks that have been authorised for receiving property tax payments:
Canara Bank
HDFC Bank
Induslnd Bank
Corporation Bank
IDBI Bank
Indian Overseas Bank
Yes Bank
Kotak Mahindra Bank
ING Vysya Bank
Online payment method for BBMP Property Tax:
The online payment method can be completed in a few simple steps:
Visit the payment gateway of BBMP site or simply click here
Enter the old PD number or new PID number or Base Application Number or Block Base Application Number or Block Renewal Application Number to access the details of the property tax due and instructions regarding online payment
BBMP generates a tax receipt as a token of acknowledgement for the property tax payment. This receipt mentions essential details about the payment like assessment year, application number, payment location, the amount due, the applicable cess, the final tax payable, advances paid (if any), etc.
If the payment due is made through cash, credit/debit card or demand draft, the tax receipt is issued immediately. However, for online payments, a soft copy of the receipt will be generated, which can be saved, so that a printout can be taken for future reference.
You can avail tax deductions on property tax from Gross Annual Value (GAV) of the property on the computed income under house property in the assessment year on fulfilling these conditions:
GAV of the property is not zero, which is possible only when the property is self-occupied
The owner of the property pays the tax
Owners of property in Bengaluru are liable to pay property tax to the State Government through the state’s municipal body, known as Bruhat Bengaluru Mahanagara Palike (BBMP), payable every year. This tax serves as a source of revenue for development and maintenance of essential infrastructure and amenities like construction and maintenance of roads and parks, cleanliness of the locality, efficient drainage, etc.
The BBMP abides by the Unit Area Value (UAV) system, for computing the taxable amount towards property tax. The UAV is calculated based on estimated returns from the property, taking into consideration various factors like type and location of the property.
The property tax calculation is done by multiplying the area occupied by the property by the fixed rate of its per sq. ft. tax in a month (UNIT), which is again and multiplied by the existing property tax rate (VALUE). The per sq. ft. tax rate is determined by the current value of the property, depending on its location. The jurisdiction of the BBMP is categorised under six value zones, as per the guidance value mentioned by the Department of Stamps and Registration.
The online payment method can be completed in a few simple steps:
Visit the payment gateway of BBMP site or simply click here
Enter the old PID number or new PID number or Base Application Number or Block Base Application Number or Block Renewal Application Number to access the details of the property tax due and instructions regarding online payment
Bruhat Bengaluru Mahanagara Palike, abbreviated as BBMP, is Bengaluru’s municipal body that is authorised by the State Government of Karnataka to collect indirect taxes, among several other responsibilities. Indirect Taxes, like the Property Tax, are taxes that are collected by BBPM from the general public of the state on behalf of the state government.
The A Khata is a document that confirms that the owner of a property in Bengaluru has paid the property tax due against his/her name to the BBMP, and therefore holds the legal ownership of the property. The A Khata was introduced to simplify the collection process of Property Tax. An A Khata makes property owners eligible to apply for building licenses, trade licenses and loans on the property. A property owner will not be able to make any financial transactions related to his/her property without an A Khata.
The concept of B Khata was introduced by the Section 108A of the Karnataka Municipal Act, 1976, which was later amended in the year 2009. The order issued by the Karnataka High Court in December 2014 directs BBMP to maintain a list of illegal properties in Bengaluru, even those for which the civic charges have been paid by the property owners. This list streamlines the process of tax collection from owners of properties that have been illegally constructed, that is, properties that violate the bylaws, follows unauthorised layouts, have been constructed on revenue land or those without issuance certificates. Fulfilling a few criteria enables property owners to upgrade B Khata properties to A Khata properties – clearing payments due till date, paying Betterment Charges as levied by the BBMP or DC converted property.
The Khata Certificate refers to the verification document for the owner of a specific property in Bengaluru. It certifies that the holder of the Khata certificate is the legal owner of that property.
