From paying on time to maintaining your property, discover how to lower your BBMP property tax bill and avoid penalties with these expert tips.
Overview
If you are a property owner in Bangalore, you are likely aware of the BBMP property tax you must pay annually. The property tax is based on the value of your property, and it is an important source of revenue for the BBMP (Bruhat Bengaluru Mahanagara Palike). However, if you are looking for ways to reduce your BBMP property tax, there are a few tips and strategies that you can consider. This article will discuss some of the most effective ways in reducing your BBMP property tax.
Top 8 Effective Ways to Reduce Your BBMP Property Tax
Claim Exemptions and Deductions
One of the easiest ways to reduce your BBMP property tax is to claim exemptions and deductions. There are various exemptions and deductions available under the BBMP property tax rules that you can claim to reduce your tax liability. For instance, if you are a senior citizen, you can claim a deduction of up to ₹ 5,000 on your property tax.
Similarly, if you have installed rainwater harvesting systems on your property, you can claim a deduction of up to ₹ 5,000 on your property tax. You can also claim deductions for installing solar panels or for using environmentally-friendly construction materials.
Pay Your Property Tax on Time
Paying your property tax on time can also help you reduce your BBMP property tax. If you pay your property tax before the due date, you can avail of a discount of up to 5% on your tax amount. Moreover, if you pay your property tax for the entire year in one go, you can also avail of an additional discount of up to 5%.
Challenge Your Property Valuation
The BBMP determines the value of your property based on various factors such as the location, size, age, and amenities of your property. However, there may be instances where the BBMP has overvalued your property, which can result in a higher property tax liability.
In such cases, you can challenge the BBMP’s property valuation and ask for a reassessment of your property’s value. If the reassessed value is lower than the original value, your property tax liability will also be reduced.
Apply for Property Tax Rebate
The BBMP offers property tax rebates to property owners who have significantly contributed to society. For instance, if you have donated land or property to a charitable organisation, you can apply for a property tax rebate of up to 50% on your property tax.
Similarly, if you have significantly contributed to sports or cultural activities, you can also apply for a property tax rebate.
Opt for Self-Assessment
Another way to reduce your BBMP property tax is to opt for self-assessment. Under self-assessment, you can determine the value of your property on your own and pay the property tax accordingly.
This can be beneficial if you feel the BBMP’s property valuation is too high. However, you must ensure that your self-assessment is accurate, as any discrepancies can result in penalties and fines.
Maintain Your Property Well
Maintaining your property well can also help you reduce your BBMP property tax. The BBMP offers a 5% discount on property tax to property owners who maintain their property well and keep it clean and hygienic. Therefore, it is important to keep your property in good condition and ensure that it is free from any violations, such as encroachments or unapproved constructions.
Avail of Property Tax Installments
You can also avail of property tax instalments if you cannot pay your property tax in one go. The BBMP allows property owners to pay their property tax in two instalments. However, you must ensure that you pay the installments on time, as any delays can result in penalties and fines
Seek Professional Help
If you are still trying to figure out how to reduce your BBMP property tax, seek professional help. Many tax consultants and property lawyers can guide you through the process and help you identify the best strategies for reducing your property tax. They can also help you prepare and file your property tax returns accurately, preventing any penalties or fines.
Conclusion
Reducing your BBMP property tax can be a complex and challenging process. However, following the tips and strategies outlined in this article can significantly reduce your property tax liability and save money in the long run. Remember to claim all available exemptions and deductions, pay your tax on time, challenge the property valuation if necessary, maintain your property well, and seek professional help if required. With these strategies in place, you can minimise your BBMP property tax burden and enjoy greater financial stability.
Vakilsearch can help you reduce your BBMP property tax by providing professional legal and tax consulting services. Our team of experienced property lawyers and tax consultants can guide you through identifying tax exemptions, deductions, and rebates that apply to your property. We can also help you challenge the BBMP property valuation if necessary, prepare and file your tax returns accurately and on time, and avoid penalties or fines. With Vakilsearch’s assistance, you can minimise your BBMP property tax liability and enjoy greater financial stability.
FAQs
What is the 5% discount on BBMP property taxes, and how can I avail it?
The 5% discount on BBMP property taxes is a rebate offered to taxpayers who pay their property tax in full by the due date. To avail the discount, you can pay your property tax online or through any of the designated Canara Bank branches in BBMP limits.
Are there any property tax rebates available for the year 2023-2024 from BBMP?
Yes, the following property tax rebates are available for the year 2023-2024 from BBMP 5% rebate for paying property tax in full by the due date, 50% rebate for senior citizens and differently-abled individuals, 100% rebate for properties used for educational or charitable purposes
What are the consequences of not paying BBMP property tax on time?
If you do not pay your BBMP property tax on time, you will be liable to pay a late fee of 2% per month, up to a maximum of 24%. You may also be subject to other penalties, such as confiscation of your property.
When is the last date for paying BBMP property tax in 2023?
The last date for paying BBMP property tax in 2023 is 30 April 2023.
Can you explain the latest tax exemptions for property owners in 2023?
The most recent property tax exemptions available to property owners in 2023 encompass several notable provisions. These include a 5% rebate for those who make prompt full payments of their property tax by the due date. Senior citizens and differently-abled individuals are eligible for a substantial 50% rebate.
Properties utilised for educational or charitable purposes are granted a full 100% rebate on property tax. Additionally, new buildings are exempt from property tax for the initial four years, while vacant land enjoys a property tax exemption for the first three years. These exemptions offer various financial benefits to property owners in the current year.
Are there any changes in the tax regime for 2023-2024 that could affect property taxes?
The BBMP Amendment Bill 2023, which is still pending approval, proposes to make several changes to the property tax regime, including Increase in the property tax rates, Introduction of a new tax slab for high-value properties, New exemptions for certain types of properties.
What are some effective strategies for saving tax on my property?
Some effective strategies for saving tax on your property include paying property tax in full by the due date to avail the 5% discount, claiming all eligible property tax rebates, Filing your property tax returns accurately and on time
How can I reduce the tax liability when selling a property?
There are a few things you can do to reduce your tax liability when selling a property, such as Invest the capital gains from the sale of your property in a tax-saving asset, such as a new home or a tax-saving investment scheme, claim any eligible deductions, such as cost of acquisition and improvement of the property, set off your capital gains from the sale of your property against other capital losses.
Is there anticipation of changes in the tax slab for 2023, and what might they be?
There is no anticipation of any changes in the property tax slabs for 2023. However, the BBMP Amendment Bill 2023, which is still pending approval, proposes to introduce a new tax slab for high-value properties. If the bill is passed, it could lead to higher property taxes for some property owners.
What is the BBMP Amendment Bill 2023, and how does it impact property tax calculations?
The BBMP Amendment Bill 2023 is a proposed bill that seeks to amend the Bruhat Bengaluru Mahanagara Palike Act, 2007. The bill proposes to make several changes to the property tax regime, including Increase in the property tax rates, Introduction of a new tax slab for high-value properties, and new exemptions for certain properties.
How can I reduce my BBMP property tax?
Ensuring prompt payment of your property tax can lead to savings on your BBMP property tax bill. By paying before the deadline, you can enjoy a discount of up to 5%. Additionally, paying the full year's tax in advance qualifies you for an extra discount of up to 5%.
How can I save tax on my property purchase?
If you've secured a home loan for buying or building a property, you're eligible for exemptions under this section prior to purchasing or starting construction. However, completing the construction within three years is necessary to claim the full tax deduction of ₹2 Lakh.
Can I save tax on the BBMP property loan?
Yes, you can save tax on BBMP property loans by claiming deductions on the interest paid under Section 24(b) of the Income Tax Act. Additionally, you can also claim deductions on the principal amount repaid under Section 80C. Consult a tax expert to maximise your savings within the legal framework.
When to pay BBMP property tax for 2023-2024?
Property tax returns for 2023-2024 must be submitted by 31 March 2024, with no option for reducing taxes. Any outstanding balance can be settled online or via designated bank branches.
What is the percentage of property tax in BBMP?
As per the draft, property tax rates for different types of residential properties vary: 0.2% of the guidance value for tenanted properties, 0.1% for self-occupied properties, and 0.025% for fully vacant land.
Can I claim the property tax paid on the self-occupied property?
To qualify for the tax benefits on a self-occupied property under Section 80EEA, a taxpayer can claim a deduction of up to ₹2 lakh on the interest amount as per Section 24(b) of the Income Tax Act.
I have paid property taxes for my rental property related to the previous year, can I claim the benefit under house property now?
Yes, you can claim the property tax paid for your rental property as a deduction under the house property in the year it was paid. This deduction can be claimed under Section 24 of the Income Tax Act, reducing your taxable rental income and ultimately lowering your tax liability for the year.
Is there any limit for the amount to be claimed as property tax?
People purchasing a new home are eligible to claim a deduction on the cost under section 80C of the Income Tax Act, which typically equals approximately 10% of the total house cost. However, deductions under this section are capped at ₹1.5 lakh.
