Understanding BBMP Property Tax In Detail

Different types of taxes are levied by the Government of India for collection of revenue to help fund the plentiful amenities provided for the public at large. These taxes are levied by the Central Government whereas a property tax is levied by the State Government. Property tax calculation can be a time-consuming process and complicated to a great degree. A step-by-step process helps you get a clear understanding of the process.

What is a property tax you may ask? A property tax is levied to ensure the smooth functioning of various civic amenities. The type of properties that come under the property tax include independent buildings (both residential and commercial), flats and apartments, storage spaces, shops, vacant land, etc. If you already own a home or are in the process of buying a new one, it’s essential that you too understand the intricacies of property tax.

Through this particular blog, we will be simplifying the property tax levied by the Bengaluru Municipality called the Bruhat Bengaluru Mahanagara Palike or BBMP property tax and even learn about the benefits that you can avail under this structure.

First, let’s learn a few more details about the BBMP property tax.

ABOUT BBMP

Property owners in Bengaluru are liable to pay property tax every year to Bruhat Bengaluru Mahanagara Palike or BBMP which is Bengaluru’s Municipal body. BBMP utilises these funds to provide civic amenities and facilities for the public in Bengaluru.

The BBMP property tax amount calculation depends on the Unit Area Value (UAV). The UAV is further based on expected returns from the property, which depends upon two factors: Location of the property and its usage.

The calculation of property tax is done by multiplying the area of the property (In square feet) by the monthly tax rate (measures per sq. ft.). This monthly tax rate in turn is decided on the basis of location of the property which is then multiplied by the current property tax rates. There are 6 value zones, each of which has a different tax rate. The standard formula for computation is:
Property Tax = (G-I) x 20%
Here G = X+Y+Z and I = G x H/100
G= Gross unit area value
X= Tenanted area of property x Per sq. ft. rate of property x 10 months
Y= Self-occupied area of property x Per sq. ft. rate of property x 10 months
Z= Vehicle parking area x Per sq. ft. rate of vehicle parking area x 10 months
H= Percentage of depreciation rate (depends upon the age of the property)
The jurisdiction of the BBMP is further categorised into six value zones and it is based on the guidance value published by the Department of Stamps and Registration. Since location of the property matters when it comes to tax calculation, the rate of property tax will differ, according to the zone in which the concerned property is located.

BBMP PROPERTY TAX PAYMENT: WHEN TO PAY

The payment of BBMP property tax can be done both online as well as manually. What really matters is, to avoid penalty, you need to pay property tax on time.

1. The period for payment of property tax extends over a standard financial year. For example, FY 2019-20 extends from 1st April 2019 to 31st March 2020. The tax needs to be paid by 30th April of the subsequent financial year (FY).
2. A 5% rebate on property tax is offered by BBMP on payment of property tax in one instalment and within the due date stipulated by the Municipal Body.
3. An interest of 2% per month or 24% per annum is charged on delayed payment of property tax.
4. It is possible to pay property tax in two instalments without attracting any interest and without rebate.

CALCULATION OF BBMP PROPERTY TAX

The formula or equation for calculating BBMP property tax is:
Property tax (K) = (G – I)*20% + Cess (24% of property tax)
Where,
G = gross unit area value arrived by X + Y + Z
I = G*H / 100

The other variables (X, Y, Z, and H) represent,

X = Tenanted area of property x per sq. ft. rate of property x 10 months
Y = Self-occupied area of property x per sq. ft. rate of property x 10 months
Z = Vehicle parking area x per sq. ft. rate of vehicle parking area x 10 months
H = Percentage of depreciation rate, which depends upon the age of the property
Hence, BBMP property tax is equal to 20% of the total area of property (whether it is tenanted or self-occupied, and has a vehicle parking area) multiplied by per sq. ft. rate fixed by BBMP for each kind of usage of property for a period of 10 months reduced by depreciation allowed by BBMP with an additional 24% cess on property tax.

BBMP PROPERTY TAX PAYMENT

Let’s understand how you can pay the BBMP tax online or offline.
BBMP Property Tax Online Payment
Step by step process:
1. Visit BBMP property tax portal: https://bbmptax.karnataka.gov.in/
2. Enter earlier SAS Application Number or PID (both available on the last receipt) and click on ‘Fetch’ which will display the details of the property owner.
3. Click on ‘Proceed’ if the details displayed are correct and there are no changes in the property. It will take you to Form IV.
4. If there are any changes or discrepancies in the property details such as property usage, built-up area or occupancy, first check the box provided on the page and then click on ‘Proceed’ which will take you to Form V.
5. Ensure all the pre-filled details in the form, including tax computation, are correct. If not, modify the relevant details in case of change and proceed to pay, either fully or in instalments, either online or via challan.
6. If you choose the online payment option, it will take you to the payment page where you can choose to pay either via net banking or credit / debit card to complete the payment. Once the payment is complete, a receipt number will be generated, and the E-receipt will be available on the portal after 24 hours. Receipt can be printed or downloaded here: BBMP Download Receipt
7. If you face any problem while paying online or the payment is not processed, you can resume the payment using the current SAS Application number here: Resume Property Tax Payment
8. If you face any issues via online payment, you can email BBMP at contactus@bbmp@gmail.com or raise a complaint at: Property Tax Grievance System

BBMP Property Tax Manual Payment

In case of manual payment of property tax, you have to fill all the applicable forms and take them to either of the following centres to pay the property tax either by card or a Demand Draft:

• Bangalore 1 centre
• Assistant Revenue Officer offices

You can even visit the following banks which are authorised to collect the property tax:

Canara Bank, Axis Bank, HDFC Bank, ICICI Bank, IDBI, Corporation Bank, Indian Overseas Bank, YES Bank, Kotak Mahindra, Indian Bank, SBI, Maharashtra Bank, IndusInd Bank.

If you have chosen the mode of payment as challan while filling out the form online, you can pay the property tax at any of the above centres or banks.

TAX BENEFITS OF PROPERTY TAX

Property tax paid can be deducted from the Gross Annual Value (GAV) of the property while calculating income under house property in the financial year. GAV, as the name suggests, is the income generated by a property on an annual basis, regardless of whether it is let-out or not. This is possible only if the following conditions are met:

• GAV of the property is not NIL (i.e. it is not a self-occupied house property)
• Property tax is paid by the owner

As mentioned before, computation of property tax can seem complicated however, we have tried to simplify the process for you with a step by step breakdown. We hope you find this information useful the next time you have to pay property tax if you own a property in Bengaluru. In case you are on the lookout for a residential property in Bengaluru, you can check out our Mahindra Windchimes project and visit the site for further details on the project.

Reference:
Getmeroof.com – A guide to understanding BBMP property tax in Bangalore
Cleartax.in – BBMP Property Tax