The whole Union Territory of Delhi is split into 3 municipal zones. These include Delhi Cantonment Board, Municipal Corporation of Delhi, and New Delhi Municipal Corporation. Covering the whole NCR region, they are responsible for all municipal duty as well as tax collection. This primarily includes property taxes, both commercial as well as residential.
The Municipal Councils of Delhi levy property tax on all registered properties universally, though they control the collection and other duties of their specific zones. In the case of Delhi, the Municipal Corporation is also divided into 3 divisions – North, South and East. In case of business owners, a few additional aspects of NDMC property tax must be understood since they are crucial factors which impact the expenses and profit of a business.
Any entrepreneur, who owns his /her business property, even if the property is mortgaged for a loan against property, must pay tax.
All tax-related details in India and specifically in New Delhi are discussed herein.
Taxation from commercial property
Municipal tax is applicable on all types of properties, irrespective of whether they are residential or commercial. Each of these councils has specific taxation slabs which are applicable on the zone they cover.
The tax is calculated on the basis of an estimation of the revenue that property is capable of generating. This is termed as the ‘annual value’ of a property. Be it NDMC property tax or in other zones, typically, these rates are revised on a yearly basis. While this tax comes under incomes from house property, subletting a commercial property comes under taxes from other incomes. Consequently, owners or anyone subletting a property should keep this in mind while paying their taxes.
Property tax calculation
The basic formula for calculation of property tax is given below.
Property tax = annual value X existing tax rate.
While the formula decides tax amount that an owner has to pay, there are numerous factors which are taken into account while deciding both the annual value as well as the tax rate.
Property tax payment online
The most convenient method of paying property tax is via online. Consequently, the process of paying property tax bill online is explained in detail below.
- Owners must visit the official website of Municipal Corporation of Delhi and select the zone applicable for them. These are North, South, and East.
- It is advisable to go through all the terms and conditions before agreeing to them and proceeding.
- Here, owners should select the option to file property tax.
- Next, property ID should be submitted. The different details should be checked and updated as necessary.
- Multiple payment options are available for owners. After completion of payment, a receipt is generated. This receipt should be preserved for any reference in the future.
Exemptions and benefits
While there are certain tax benefits on loans against property, there are very few exemptions or benefits on property taxes. In the case of borrowers, it is important to know how they can avail tax benefits on their loan against property.
For instance, tax benefits on loans against property include exemptions equal to the interest paid in a financial year with no upper limit u/s 80C. Note that commercial properties are not eligible for these exemptions. The interest amount including processing fees and other charges can also be claimed as tax exemptions for properties which have been let out.
As such, loans against properties are eligible for numerous benefits on NDMC property tax. Financers like Bajaj Housing Finance Limited even present pre-approved offers which make availing these loans very easy and convenient. These offers are available on many types of financial products like loans against property, business loans, personal loans, etc. You can check out your pre-approved offer by providing your name and phone number.
Even for upcoming entrepreneurs who have started their business with the help of a loan, paying house tax online can be very convenient. While they have to input a few details during the first transaction, it becomes more convenient from the next time. Entrepreneurs about to start their business with a loan against property should maintain and preserve all tax receipts for any future needs.