Property tax is the annual tax levied on a real estate asset. The urban civic body collects the tax and uses it to develop the physical and civic infrastructure of the city. However, the property tax amount varies from location to location. The article below covers the important details and process of paying property tax in Kolkata.
The Kolkata Municipal Corporation (KMC) manages the urban infrastructure and development in the city. The authority is not only responsible for maintaining the existing infrastructure but also for the development of new infrastructure projects such as roads, rails, drainage facilities and water and electricity supplies, among others. The main purpose of the civic body is to improve the livability quotient of the city. In turn, the corporation levies a few taxes on the residents. While there are a plethora of duties levied such as road tax, water tax and others, here we will categorically focus on the property tax in Kolkata.
How is property tax calculated in Kolkata?
In December 2016, KMC passed the Kolkata Municipal Corporation (Amendment) Bill 2016, to streamline the property tax assessment and collection in Kolkata. The Act empowered homeowners to self-assess the annual tax value for their properties and also authorised KMC to regulate the increase and decrease in property tax to a certain extent.
Earlier, KMC computed the property tax as per the Annual Rateable Value (ARV) method. However, the ambiguities and complexities related to the method compelled the corporation to resort to a simpler and transparent tax calculation mechanism - Unit Area Assessment (UAA).
Key highlights of UAA
- KMC introduced UAA in March 2017 to simplify the property tax computation in the city. Under the new scheme, the city is divided into 293 blocks, which are further segregated into seven categories from A to G. The segregation is as per the market value of the properties, facilities and infrastructure.
- Corresponding to each category (A, B, C, D, E, F and G) an annual value per sq ft, i.e. a Base Unit Area Value (BUAV) is assigned. The category 'A' has the highest BUAV, while group 'G' has the lowest BUAV.
- The bustee/slum and Thika-tenanted areas are categorised as 'G', regardless of the geographical location to reduce the tax burden on the economically weaker classes. Similarly, all the recognised Refugee Rehabilitation (RR) colonies including settlements under the government or notified EWS and BSUP schemes are categorised as 'E' irrespective of their geographical situation under any block or category unless these belong to a block whose grade is lower than 'E'.
- Categorisation under UAA ensures parity in the tax payment system as all the properties under the blocks are taxed uniformly.
Multiplicative Factors System
The Multiplicative Factors system (MFs) is also an integral part of the property tax computation in Kolkata. MFs comprise elements such as the use of the property, geographical position of the property, age of the property, type of structure, and the nature of occupancy.
As per the factors mentioned above, a flat tax rate of 6-20 percent is applied, and the same has been notified in the UAA system. For instance, a property in the premium locations of the city will attract a higher tax rate than those in the lesser popular markets. One of the significant benefits of MFs based property tax computation under UAA is that the levy is much lower than the ARV system where the tax rate varied from 11 to 40 percent.
Besides, the UAA also brings in a feature where the homeowner can self-assess the annual property tax as opposed to the ARV system where only the assessment inspectors were supposed to assess the property which led to a lot of discrepancies and vagueness in the tax computation process.
Formula to calculate property tax in Kolkata
Annual tax = BUAV x Covered space/Land area x Location MF value x Usage MF value x Age MF value x Structure MF value x Occupancy MF value x Rate of tax (including HB tax*)
*HB tax is the Howrah Bridge tax which is levied only on properties under specific wards
*The BUAV and MF values for computing tax are notified on the official website of KMC
For further details, please visit the section “Brief Account of the Unit Area Assessment System” and refer the relevant pages of ‘Scheme’, ‘Regulation for Covered Space’, ‘Tax Capping’ and Rule for ‘Self-Assessment System Manner and Forms.”
What is the procedure for online payment of property tax in Kolkata?
Visit the KMC website, and click on the assessment-collection option under online services.
Go to the assessment homepage and click on ‘Make Online Payment’ tab.
Upon clicking on ‘make an online payment,’ three options will appear
- Current PD - It stands for periodic demand bills. These bills are issued annually and based on the last valuation of the property
- Outstanding LOI - Outstanding Letter of Intimation (LOI) is for those unpaid bills that are either PD or F/S.
- Fresh-Supplementary - Fresh-Supplementary are those bills that are issued either after a hearing reflecting the changes to the earlier released bills or upon the first valuation of the property.
Click on the desired option and fill in details such as assesse number, email id and contact number.
Pay the amount displayed and collect the e-receipt. In case you forget to collect the receipt you can go to the reprint section and avail it again.
The UAA mechanism for payment of property tax in Kolkata has not only simplified the tax procedure in the city but also made it easier for the residents to evaluate the tax due. Moreover, the online system is also a boon as homeowners can pay the taxes digitally without wasting time and effort.