Property owners in Bangalore are required to pay BBMP property taxes to the State Government. This article will explain how the BBMP computes property tax.
The primary source of funding for the nation’s major public utility is tax. Among other taxes, property tax is the one that needs to be paid by the property owners. The municipal corporations of each state have the authority to impose property taxes. Municipal corporations have been given the authority to impose a tax by the State Government. How BBMP Compute Property Tax Know more!
Therefore, there are regional variations in the method of payment and tax rates. Understanding how to pay taxes is a challenging issue for residents, as property ownership comes with its complications. Bengaluru people also need to pay tax to BBMP. So, let’s get to know what BBMP is and why it is important.
What is BBMP Property Tax?
The abbreviation BBMP means Bruhat Bengaluru Mahanagara Palike. This is a municipal corporation that utilizes all these funds to improve and maintain each public facility in the city. The responsibilities include maintaining roads, parks, drainage systems, and many more.
It has many other responsibilities to perform and is the fourth-largest municipal body in India. If you are a resident of Bengaluru then you are required to pay property taxes to BBMP if you have a property such as a commercial or residential building, apartments, flats, shops, or any vacant plot. Once a property is registered in your name you are responsible to pay tax for that. Before learning how BBMP tax is calculated, let us know about the factor that determines the tax amount that has to be paid.
What Are the Components That Determine the Money to Be Paid?
Property tax consists of two important components that are used in determining the amount of money needed to be paid. Two components are- zones and taxable capital value.
There are six different zones: The west zone, East zone, South zone, Dasarahalli zone, Mahadevapura zone, and Yelahanka zone. According to the zones, the tax rate is given. But there are some locations like Queens Road, which runs between the cricket stadium and Cubbon Park, which are not included in any zones. In that case, taxes must be estimated using the highest rates currently in effect in the closest neighborhood, street, locality, and so on.
How Is the BBMP Tax Computed?
BBMP property tax is computed using three different methods-
ARV system- Annual Rental Value System, also called Rateable value, is determined by taking into account the property’s features, size, and location. A state’s municipal body determines the property’s gross annual rent and levies taxes based on the anticipated value.
CVS- In the Capital Value System, the tax is calculated based on the property’s market value.
The local stamp duty department establishes the market value.
UAV- Unit Area Value or Unit Area System is calculated based on the rate of tax per square foot per month which is determined by the property’s location, the street where it is located, and the value of the property at the time.
In Bangalore, the BBMP compute property tax using a UAV system and the tax can be paid both online or offline. The formula is:
K(Property tax)= J( Net unit area value of the property) * 20%, and
J=G- I, where
G= T+S+C and I= (G * H)/100
G= Gross unit area value
T = (Tenanted area of the property) * (rate of property per square feet) * 10 months
S = (Self-occupied area of the property) * ( rate of property per sq.ft.) * 10 months
C = (Car parking area) * ( car parking area rate per sq.ft.) * 10 months and,
I=(G*H)/100
I – Depreciation amount
H – Percentage of depreciation rate, which is calculated based on the age of the building or property.
While computing the BBMP tax amount there are a few things that need to be kept in mind:
The owner of the property must pay the tax by 30 April of the following financial year. The veranda parking zone and open parking space should not be considered part of the property’s built-up area.
If any property is neither rented out nor is being used as a primary residence, the occupancy status can be used to determine the tax.
The taxpayer must pay the BBMP tax for the unoccupied land even if no building or property is built or destroyed.
A monthly penalty of 2% and an additional annual interest charge of 24% will be assessed for BBMP property tax payments that are made beyond the due date.
The tax amount can be paid either in full amount or in installments.
What Are the Reasons Why Property Tax Can Increase?
There are some reasons for which the property tax amount can increase, which are: Home improvements- Your property’s worth will surely rise at the time of the subsequent appraisal if you install a home office, a pool, or an expansion.
Zonal Reclassification- If the locality of the property is shifted from one zone to another tax zone with a higher tax rate, then the property tax will increase.
Area change- If any remodeling or expansion is done within the property then the built-up area amount may increase.
What Are the Different Forms for BBMP Property Tax?
The different BBMP Property Tax forms are-
- Form I- Property owners who have a Property Identification Number must complete this form (PID). The PID, which is a dynamic information code or number assigned to the property, contains all the specific information about the road, plot, and property custodian. Form II- Property owners who do not have a PID but do have a Katha number must use this form. The Katha number, which contains all the specific information about the asset or property, is a special or exclusive number on the Katha certificate that was granted for it.
- Form III- Property owners in Bengaluru who lack a PID or the Katha number are needed to submit this form.
- Form IV- When there have been no changes to the property information, Form IV must be submitted by the property owners. It is simply a white form. The size of the property or any status changes may be mentioned in connection with this information.
- Form V- Property owners who have made improvements to their property, such as adding a new floor, converting it from non-residential to residential use or vice versa, or demolishing it, must submit this form, which is a blue form.
- Form VI- Property owners who are eligible for exemptions from paying property taxes must use this tax form. This tax form can be used to pay the required service amount.
Conclusion
Computing BBMP Property tax can be confusing for some people. It involves a formula based on which the tax amount is calculated. However, Vakilsearch is here to take all your worries away. Simply get in touch with us, and our legal experts will provide you all the help you need for filing your BBMP property tax accurately!
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