Last Updated on September 2, 2022 by Hub Blogging
Worried about the delay or default in payment of property tax penalty or confiscation of property? Before addressing the topic of this article, let us understand what property tax is. Why is it needed? Who pays the property tax? Who collects property tax? Read on to gain a piece of in-depth knowledge on this topic.
What is Property Tax?
Property tax is levied on properties like land, house, rental office, etc. It is an ad valorem and regressive tax which is to be paid by the owner of the property. The owner could be an individual or a legal entity, such as a corporation. The local government or municipality is the authority that collects the property tax.
The local governing body, e.g., the municipal corporation of Gurugram (MCG), utilizes the tax revenue to provide civic services like water and sewer improvement, law enforcement, fire protection, education, road and highway construction, and other beneficial services for the community.
How is the Property Tax Rate calculated?
The property tax rate is calculated based on various factors like locality, size, type, and age of the property, its usage, the covered area, owner profile (age, gender, occupation, or income), and so on. Usually, the rate of property tax for commercial property is higher than that for residential property. Specifically, it is calculated as a percentage of the annual rental value, capital value, or unit area value of the property. However, different municipal corporations have different methods of calculating the property tax rate.
E.g., property tax in the municipal corporation of Gurugram is calculated based on the size and use of the property. To make the property tax assessment and payment system seamless, the MCG came up with a new system in 2013 that allows citizens to self-assess their tax liability depending on the type of house they have.
How to pay Property tax in Gurugram?
Property tax needs to be paid annually. You can pay your property tax by personally visiting the MCG office or doing it online. One can also pay property tax by visiting Property Tax Collection Centers, also known as Citizen Facilitation Centers, or any branch of Oriental Bank of Commerce in the city.
The last date for MCG property tax payment is July 31st of the respective assessment year. Property owners who pay the tax within 45 days from the date of notification are provided a 30% tax rebate (30% of the payable tax amount is returned to the owner). Also, paying the property tax before the due date will attract a rebate of 10% on the applicable tax amount.
How to pay Property tax online in Gurugram?
The online property tax payment process in Gurugram is as easy as the following three steps:-
Step 1: Log on to the MCG website, https://www.mcg.gov.in/. On the left-hand side, you will find the tab, Property tax. Click on it to reach another page which will show you multiple options. You would initiate the payment process by clicking on the ‘Property tax’ tab on this page. To download your property bill or register your complaint with regard to the bill, click on the ‘Property Tax Bill’ option.
Step 2: On the page that appears, you will have to enter all the details of your property. These include Property ID, Owner name, Father/Husband Name, Mobile number, Email ID, Zone, Locality, Ward, and Address. After carefully filling in all the details, click on the ‘Search’ button.
Step 3: The page that now appears will show you your property tax. If there is no miscalculation in the amount, proceed to pay the MCG property tax through debit/ credit card details, online banking credentials, or UPI wallet details. On entering valid details, you have paid your property tax.
Penalty for late payment of Property tax in Gurugram
Residents and housing societies, who choose not to co-operate with the tax surveyors in Gurugram, will have to bear the brunt as the MCG has decided to file First Information Reports (FIR) against property tax defaulters. If the citizens fail to provide the information sought by the property surveyors, amenities like power and water supply may be disconnected. The commissioner of the tax department issued this new directive after MCG faced various instances of residents and housing societies denying information to the tax surveyors.
Specifically, if the property owner fails to pay the MCG property tax within the specified timeline, an interest of 1.5% is applied per month on the outstanding payment liability. In case a property owner willfully under-reports his property tax, the authority imposes a penalty equal to the amount of tax evasion. This is in addition to the due amount of Gurugram property tax. The 1.5% per month interest will also be charged in the case of under-reporting of property tax liability, if applicable.
According to the rules, however, the penalty amount should not exceed the initial amount. There have been instances of properties being sealed by the government on consistent property tax evasions above a certain amount. However, there were some leeways granted in the payment of property tax of MCG, like the date of tax payment was extended till 31st December 2020, in the face of the pandemic.
There have also been some administrative reforms to simplify property governance in the state of Haryana. The chief minister announced and implemented a Unique Property Identification number for the property in the state, including those owned by government agencies. This was done to reduce property-related disputes and simplify land and property-related records for the public.
Time and again, the tax department of the municipality or the state government machinery keeps devising some methods to simplify the tax assessment and collection and make the process more transparent. The habit of citizens evading taxes forces the authorities to utilize carrot and stick policies to motivate the timely payment of taxes. Property taxes should be paid regularly in a timely manner to avoid any strict legal action or penalties and avail the benefits of civic facilities.
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