Factors to be Considered while Calculating Commercial Property Tax

By : 360 Realtors

25 July, 2018

One of the biggest sources of revenue for not only the Municipal Corporation of Delhi but most of the local governments throughout the world is the Property Tax. The property tax is the tax that the government collects from the owners of real estate India. However, the quantum of the tax varies from place to place. The biggest task for property owners in Delhi NCR is the calculation of the property tax amount and its payment to the government. Due to this very reason, the performance of Delhi is worst as compared to various other cities in India when it comes to property tax collection.

As per the various studies, 30% of the properties in Delhi are not registered in the Delhi property register. As per the survey reports of 2011, out of 25.3 lakh properties, only 9.6 lakh properties are registered. In Delhi, the property tax is calculated based on the Annual Value method. Payment of Property tax has to be made to any of the three municipal corporations of the Delhi. They are:

•    North Delhi Municipal Corporation

•    East Delhi Municipal Corporation

•    South Delhi Municipal Corporation

The tax that is collected by the way of Property tax is later used to maintain the basic civic amenities. Hence in order to keep the city of Delhi neat and clean, it is important that maximum tax is collected by the way of property tax. The government of Delhi has announced several benefits and discounts to the landlords who pay the property tax on time. But to avail these benefits one has to have the knowledge of the tax calculation and the method of payment. It is important to understand property tax if you want to buy home in India.

Calculation of Commercial property Tax: in Delhi, the property tax is calculated by the Annual Value Method. So the formula is:

Property tax = Annual Value X Rate of Tax


Annual value = Unit area value X unit area X Age factor X Use factor X occupancy factor X Structure factor

Unit area value is the value assigned per square metre built up area.

Unit area of the property is the total built-up area in sq. mtr.

Age factor relates to the age of the property. Newer the property higher the tax and older the property lower the tax.

Another factor is usage, wherein-lower use factor for residential property and higher for non-residential ones.

Occupancy factor means lower tax for self-occupied properties and higher tax for rented properties.

Structure factor means the tax charged based on the type of construction. There is higher tax for concrete construction and lower tax for lower value construction.

Payment of Municipal tax in Delhi: Earlier the tax payment was very difficult as manual registers mere maintained. But nowadays the whole procedure has to move to the online system and payment is made very easy. 

Just as you can buy flat in India online in the same manner you can even pay the property tax on India property online.