Tips to Reduce Property Tax in India

Introduction

Property tax is the type of tax which is paid to the government by property owners in a country. Property taxes are a medium through which various government development activities are funded, such as community services, infrastructure projects, schools, and many other essential projects. There is a separate Property Tax Act for every state, according to which the levy is decided for every property investment in India.

As state governments are too occupied with other essential tasks, the responsibility of collecting the property tax is delegated to the local municipal councils. Based on the provisions of state laws, owners must pay the property tax every six months or annually.

What is the Property Tax?

Municipal property tax is a type of real estate tax paid by individuals, entities and owners of any type of property. Property taxes are compulsory to pay for the owners per prevailing rules and regulations. There is rapid growth in the sector of property investment in India, and as a result, property tax has become an extremely crucial source of revenue for the authorities.

The amount of Municipal Property Tax to be paid is decided by the specific state government or local government and might vary across cities. Both local and state laws are taken into consideration while calculating the tax as per the Property Tax Act. The basic way to calculate the property tax is by using the city’s tax rate and the property’s value. The property tax is often affected by various factors that may vary according to the type of property purchased, the location, local and state government laws, and many more. There is a big role of tax assessors and local officials in deciding property taxes as well.

Payment of property tax is an added burden on the owner. This is the reason that many property owners are always looking for ways to lower the property tax amount that they owe. If you are also a property owner and wish to reduce your Municipal Property Tax liabilities, then here are some tips to help in your quest.

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Tips to Reduce the Property Tax in India

Implementing tips to lower property tax will certainly reduce the burden on property owners. It is crucial to note that there is no way to be completely free from the payment of Municipal Property Tax as it is an extremely crucial source of income for the authorities. But there are a few ways which will help in reducing the property taxes that you must pay every year. Some of the most useful tips to lower property tax are shared here:

Understanding the Bill

Understanding your Municipal Property Tax bill is extremely important. If you feel that the property tax you are paying is too much, then understand everything mentioned in the bill as per the provisions of the Property Tax Act. You can also calculate your taxes using the available online tools to cross-check the tax amount. The Municipal Property Tax is decided based on the changes made to the tax policies in the specific city. So, you must have access to the latest provisions of the relevant Property Tax Act to help with a proper understanding of the bill.

Limit the Improvements

Incorporating improvements to your house, like a pool, lawn, etc., can increase the amount of Municipal Property Tax. In order to lower the tax amount, try to limit the home improvements that you plan during the year. This will help ensure that the property tax is not increased substantially during a year. These improvements will definitely increase the value of your house, but they will also add value to your property tax. If you want to lower property tax for your house, it is vital to have knowledge of relevant sections of the Property Tax Act in your state.

Property Tax Breakup

Make sure to have complete information about the charges incorporated in the Municipal Property Tax amount. Ask for the property tax card from your local tax assessor and check all the details included. Many people don’t know that they can go to the tax assessor’s office and ask for their property tax card. It is necessary for all the owners to get their property tax cards and be aware of all the information about the property. If there are any errors, get them rectified at the earliest.

Researching

Before you make a property investment in India, make sure to check the neighbourhood and research the property taxes of that area. It is extremely important for people to make the decision to purchase a property keeping the property tax in mind. Review the entire area carefully before actually purchasing the property, as it can help you avoid hefty Municipal Property Tax bills later on.

Tax Exemptions

You can try checking if you are qualified for Municipal Property Tax exemption. In some cases, the government tends to provide property tax exemption to certain categories. These categories are veterans, senior citizens, agricultural properties, and properties of disabled people. If the property is in the name of any individual or entity included in this list, then it can lower property tax considerably.

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Conclusion

Being a property owner comes with a lot of responsibilities. One of these responsibilities is paying the Municipal Property Tax. But this does not mean that you do not make any attempt to lower your liability. The tips shared above can help lower property tax considerably and save you a lot of money in the long run.

Hence, you need to spare some time and explore all the available tips to reduce property tax. While you are at it, do check out the incredible real estate investment options available with Adani Realty. Their experts can help you with all aspects of property ownership, including Municipal Property Tax liabilities.