Property tax, also known as municipal or house tax, is an essential component of the Indian taxation system and one of the major sources of revenue of the governing bodies. In India, the local municipal authority is responsible for evaluating, imposing, and collecting the property tax to maintain and upkeep local civic amenities. To make the process of paying taxes hassle-free, we have come up with a complete guideline of MCGM property tax. Wondering what MCGM property tax is? Read along!
The Municipal Corporation of Greater Mumbai (MCGM), previously known as the Brihanmumbai Municipal Corporation, is the governing civic organisation of Mumbai. Residents of Mumbai owning real estate, house, shop, office, building, land, and rented properties are subject to pay Brihanmumbai Mahanagarpalika property tax. The property tax calculation process slightly varies from other municipal corporations, as MCGM calculates property tax based on the property's market or annual capital value. Thinking about how this method would affect your MCGM property tax payment? Let us give you a detailed description regarding the whole calculation as well as the payment procedure.
Previously property tax was calculated using the rate-value system where the payable tax was fixed based on rent collected from a particular property in a year. However, the system generated low revenue due to the artificially low property charges imposed by the Rent Control Board. However, the new system adopted by MCGM follows a capital value system where the tax calculation system depends on the stamp duty Ready Reckoner rate. This rate is issued by the Government, which helps to evaluate the property value based on various parameters. MCGM revises this rate annually to fix a realistic value. MCGM is the richest municipal corporation in India, whose annual budget is more than the yearly budget of some of the smaller states in the country. Now that the taxpayers know about the new property taxation system, they must know the MCGM property tax calculation process as well. Know more about Property Insurance policy by Digit.
Capital Value = Rate of the base value/ Market value of the property (based on the Ready Reckoner) x Built-up area x Age factor x Type of building X Category of use X Floor factor.
There are different weights assigned for various factors like construction type, age of the building, and user category.
Read the chart provided below to know about the weights of the respective parameters.
Weights for construction type in units:
Weights for property age in units:
Weights for user category in units:
(The weights mentioned above are subject to change (without prior notice) as per the BMC/MCGM website).
Hence, before calculating the MCGM property tax manually, one must check the website thoroughly. Also, taxpayers can calculate the property tax in Mumbai through the online calculator available in the MCGM online portal.
As stated earlier, the base value or market value of the property depends on the Ready Reckoner which is used to calculate the stamp duty by the revenue department.
Ready Reckoner calculates the base value by using the area rates issued by the Maharashtra Government in the Annual Statement Rates (ASR).
After discussing the MCGM property tax calculation process in detail, we will focus on the payment process of property tax in Mumbai.
