Human life completely surrounds around the basic necessities and these necessities are the one without which one cannot live. We do spend a lot of time struggling for many other things. Our basic necessity is food, clothes and shelter and these three are the main necessity of the person. In a country like India owning property becomes next to impossible. One of the facilities provided in India is a Home loan as well now-a-days people can avail themselves home under PMAY scheme.

Owning a home under any scheme or with the help of Home loan has become possible but rather than documentation the people in India have to fear about the taxes imposed on it. One such payable tax is Property Tax. Property tax is charged by the government on tangible assets which are owned by an individual. Taxes are a type of sources which can help to accumulate income for the government. With the help of this taxes, the resources are made available to the citizen of the country. Property tax is been paid annually by the owner of the property. Depending upon the government amenities the tax is been collected by a local state government or Municipal corporation.

Property tax calculation

Property tax charged on the property completely depends upon the location of the property. In India, the taxes vary from one state to another. As well different government amenities depending upon state calculate the property tax using different methods for calculating property tax. Also, there are various factors such as the age of the property, type of construction, amenities provided and the location depending upon which the calculation of property tax is charged.

Types of property in India

In India property is mainly classified into four categories and property divisions. The different types of property are mentioned below:

  1. Land- The basic land which is not even constructed.
  2. Improvement made to land- This includes immovable property such as buildings and godowns.
  3. Personal property- This consists of movable man-made objects such as cars, cranes and buses.
  4. Intangible property

Tax deduction against income from property

Under Section 24 one becomes eligible for the deductions

  • If one receives the rent from the rented house then this is considered as a part of income.
  • If an individual has more than 1 house then the Net Annual Value of house excluding the house in which individual lives, will be considered as income.
  • If an individual owns only 1 house and is living in the same house, the income from the house property is considered to be NIL. Any income which is been gained via rent and the annual value of additional house then it is subject to tax after deduction made under Section 24.

Types of deduction under section 24

There are two types of deduction under this Section and following are those:

  1. Standard Deduction

This exemption is made available to every taxpayer. Under this deduction, the sum equal to 30% of the net annual value is excluded from the tax limit. This deduction stands to be neglected if the individual stays in the home he/she owns.

  1. Interest on loan

If one has taken a home loan for purchasing, renovation or construction then the individual gets exempted from paying the interest in the principal amount of loan.

Following are the sub-clauses

  • In case of self-occupied property, an individual can claim exemption up to Rs.2 lakhs.
  • In case one has invested and taken a loan for the renovation or reconstruction of the house then one cannot claim the exemption until the renovation is completed.
  • In case if he/she has taken the loan for purchasing or construction of the property before the actual process of construction or purchasing is complete, one can still claim the interest. The only point comes is one can seek the deduction on the interest paid before the construction or purchase is completed in 5 equal installments from the year in which the house was bought or construction is completed.

Interest on Property Tax

Late payments attract fine and generally this is equivalent to the certain percentage of the amount due. Depending upon the state even these charges vary. Usually, the charging rates are between 5-20% depending upon the individual’s policies.

Exemption under Section 80C for property tax

Individual those who purchase the new property become eligible to claim an exemption under this section. Under this clause, one can claim the stamp duty and registration charges which could be upto 10% of the total cost of the house. This deduction is only for the new homeowner and the deduction claimed under this section should not be more than Rs.1.5 lakhs.

Also, the homeowner of the new residential property can claim other expenses which occurred during the process of transfer of the house.

How can an individual pay Property Tax Online?

Due to the internet, there is a boom in all the sectors and also it has simplified the lives of the people. People those who wish to pay online Property tax can take the following steps:

  • One needs to login to the official site of their municipality/city corporation site.
  • Choose the option indication property tax and navigate towards the payment option.
  • Choose the category under which the property falls which the individual owns
  • Choose the assessment year for which one is supposed to pay the tax.
  • One need to fill all the fields including a property identification number and other relevant documents.
  • Once the fields are been filled one can proceed by choosing the payment mode.
  • After the payment is made he/she can download the challan and take the printout for reference.


Every citizen in India is liable to pay some taxes and property tax is also one of them. Property tax and other taxes which are been collected by government authorities are used for the development of states. Though this tax is paid annually still sometimes the taxes prove to be a burden on an individual if the taxes are not paid on time the person also have to bear the burden of the penalty.