Your Guide to Paying Property Tax in Punjab

We know that having your own home is a big dream for many people. It is one of the essential for living the life you always dream of. And to fulfil this dream people take loan from financial institutions. Aside from this we also need to pay property tax to the state government.

Every property owner needs to pay property tax annually, it is one of our imperative obligation. The tax paid by us is major revenue of our government and it is ultimately utilized for our own benefit. For building up the street, parks, government funded schools, sanitisation, and other public spots.

With the digitization of country now it is very easy to pay property tax, even a person without any experience can pay property tax effortlessly. Let us guide you on how to pay property tax:

First, we need to know about the type of taxable property. Taxable properties are categorised into four types so that the government can calculate tax on the basis of these parameters:

• Land – A basic type of concept without any development or construction.
• Improvements made in the property –such as buildings and godowns, other properties.
• Personal property–movable items such as cranes, cars or buses.
• Lastly, Intangible property.

Secondly, Basic knowledge about Tax rates in Punjab:

Recently, the Government of Punjab reduced the rates of property tax and allowed its residents to self-assess as opposed to the previous requirement of a government assessment. The government has already decided to improvise the Punjab Municipal Act 1911 and the Punjab Municipal Corporation Act 1976, in accordance with the Cabinet Sub Committee’s recommendations concerning the implementation of property tax in the province.

Previously, citizens used to pay 15 percent of the fee, which for rental residential properties was lowered to 10 per cent. And then it dropped from 10 per cent to 7.5 per cent annually.

Non-rented commercial property taxes have been lowered from 15% to 3% of the annual valuation. Self-occupied houses up to 50 square yards will be charged a combined sum of Rs. 50 a year, while houses between 50 and 100 square yards will be charged a combined amount of Rs. 150 per annum.

For a self-occupied house with an area between 100 and 500 square yards, the annual property tax limit is 0.5 percent and the annual rate for a self-occupied residential house over 500 square yards is 1 percent. The average benefit for idle land and unused buildings will be 0.20 per cent.

Considering the current scenario of Covid-19 it is preferred to pay property tax online and not manually for your own safety. Though we’ll guide you with both the ways of paying tax:

Application method:

• You need to visit the Nearby Municipal Corporation & have to fill the application form.
• Along with the form, allotment fees are required to be paid.
• Pay attention while filing the form and provide all the necessary information
• Submit the form to the concerned authority.
• After the payment of fees, the official will give you Challan
• This challan is your proof of payment of Property tax and needs to be kept safe.

Online payment of Tax:

• Log in to the Municipal Corporation’s ‘official website’ to pay property tax
• Pick the property tax option, then proceed with the payment method.
• Select carefully the right form based on the classification in which your property falls.
• Choose the year of assessment for which the tax is measured.
• Fill out the identification number of the property and the necessary details and attach appropriate documents.
• Choose the payment option to pay carefully and when the transaction is complete, you can get a hardcopy or printout of the receipt for the future.

Things to take care of while paying property tax:

• There are different ways and methods of estimating property tax and method of calculation of tax varies from corporation to corporation.
• When measuring property tax, there are crucial things to note, such as the occupation status of the property, facilities in providing the property, form of construction, year of construction and floor area, and even more should be noted when measuring property tax.
• Late tax payments will lead to you paying an interest rate as in the context of a fee. Which could be paid at an interest rate of 5-20 per cent and differs from various policies.

As mentioned above that for paying property tax you need to visit municipal corporation. For property tax purposes, municipalities in the state of Punjab is classified into three groups, namely A, B, and C.

Category A: Amritsar, Jalandhar, Ludhiana, Patiala and SAS Nagar

Category B: Bathinda, Phagwara, Moga, Pathankot, Hoshiarpur, Gurdaspur, Batala, Kapurthala, Khanna, Jagraon, Nangal, Rajpura, Nabha, Mandi Gobindgarh, Sangrur, Malerkotla, Sunam, Barnala, Kharar, Zirakpur, Mansa, Dera Bassi, Muktsar, Malout, Ferozepur, Abohar, Fazilka, Faridkot, Kotkapura.

Category C: All the remaining municipalities of Punjab.

There are various tax redemptions as well which are as follows:

• All religious establishments, cow shelters, street animal care centres, cremation grounds, heritage buildings, old-age residences, orphanages, freedom fighters, BPL (below poverty line) households, ex-servicemen, municipal-controlled property and structures, government hospitals and dispensaries, government-assisted schools and universities, community clinics and dispensaries, parking lots in multi-storeyed flats and land used for agricultural and horticultural purposes. All these are exempted from property tax.
• Newly established Nagar panchayats that are included in municipalities (the ones formed before April 2014 and recent regions).
• Taxes on land measuring in 125, 50square yards are excluded. And, flats that are as wide as 500square feet. Taxes would now only be paid on well-built houses, empty land, and semi-constructed homes.
• A rebate of 50 per cent of property tax may be used by all educational establishments not under the charitable institutions.
• Widows and disabled people can get approx. 5000 rs of tax refunded.

Conclusion:

We must pay property tax on time, and it provides greater services to our city and leads to the prosperity of our country. We at SBP Group are always available for you to help you with any matter concerned with properties.