Normally, people pay property tax at their local municipal office or at a designated bank branch, but the covid-19 pandemic has put paid to this method for many. There is also the option of paying property tax online but this process has proved challenging for many. “Despite efforts of the state governments to render the online property tax payment process seamless and relatively effort-free, glitches are still there," said Prashant Thakur, director and head, research, ANAROCK Property Consultants. We tell you what’s wrong with the online property tax filing process of some of the municipal authorities.
How property is taxed
If you own a property, whether it is a house, apartment, shop, office or a piece of land, you are likely to be taxed in return for the provision of civic facilities available in and around the property. But some categories of properties or owners are exempt or have to pay tax at a lower rate. This includes agricultural land and places of worship, among others. There is a rebate for property owners who are senior citizens, women, disabled and ex-servicemen, among others. Therefore, do check the tax rate and the rules to assess your tax liability.
Property tax is calculated based on factors such as the locality, size, type and age of the property, its usage, the covered area and the owner’s age, gender, income and so on. Typically, it is calculated as a percentage of the annual rental value, capital value or unit area value of the property. However, different municipal authorities follow different methods for evaluation. The tax rate may vary even within a city.
You can calculate your property tax liability through calculators on the municipal authority’s website. In order to pay, you must have details like the property tax number, house number, type of property, address, bank details and so on. But registering to pay the tax online can be a cumbersome process.
For instance, for the first-time property taxpayers in Bengaluru, the first step would be to physically approach the Bruhat Bengaluru Mahanagara Palike (BBMP) office and submit an application. “To avoid going personally, one can also seek an agent’s help but it comes at an extra cost. As a precaution, one must make a copy of the application and get them both stamped with the BBMP seal by the personnel receiving the application," said Thakur. The process can be so complex, time-consuming and sometimes fruitless that an agent may be the only viable solution.
After this, an application number or OTP will be sent to the taxpayer’s mobile that can be used to pay the tax online. But according to Thakur, the OTP might take 15 days or more to be issued. “To get this OTP or application number, one may also need a couple of follow-up visits. The stamped copy of the application will serve in these follow-ups," he said. Once the payment is done, a receipt number is generated. But it takes at least 24 hours for the e-receipt to become available.
What’s going wrong?
It’s not just first-time taxpayers that might face issues. “Issues exist even for those who have paid online in the previous years. Some of the most common issues are servers breaking down, the amount of property tax calculated being high, property ID or mobile number not being accepted," said Thakur.
A Delhi-based tax professional, who wanted to remain anonymous, said that she was surprised when she was served a notice by a representative of the Delhi Municipal Corporation, stating that as per their records, she had not paid property taxes for several years. The notice demanded that the homeowner show up in person at the municipal office to resolve the issue. This presents another difficulty, since covid-19 related social distancing is preventing people from going out.
Not only had the individual been up to date on tax payments, she has been paying property tax online for several years. When she attempted to file her property tax online this time, she encountered several glitches, including the past records of her tax payments being unavailable on the site. This issue, encountered by many taxpayers, puts the onus on the taxpayer to upload documents and details that should already be available in the database of the municipal authority.
The issues are not limited to the Delhi area. According to Bengaluru-based chartered accountant Prakash Hegde, there are challenges in paying taxes through the Bangalore Development Authority’s website. “The payment process went through and was debited from the client’s account, but no receipt or acknowledgement was issued. If we log in again with the same details, the website is asking us to pay the amount again. We don’t have any proof except the payment acknowledgement issued by the bank, and we have no idea how to sort this out," he said.
Many of the Hegde’s clients are at a loss about how to finish filing their taxes given the covid-19 crisis. “Given the pandemic, it’s difficult for people to go to the municipal office to pay their taxes. Adequate online support and services should be made available," he said.
But the situation is not the same across metros. According to Venkat Krishnamurthy, chartered accountant and partner, V Ramaratnam and Co., a Chennai-based chartered accountancy firm, the online payment process is working smoothly in the city. “People can see all the past payments and pay their tax and get e-receipt. However, awareness might be a bit low, and many people, especially seniors, are used to paying the tax in person, so they continue to do so," he said, adding that in the districts surrounding the metro, the online payment system is not as efficient and, in some cases, not available.
While there is no simple answer to what you can do to make your property tax filing process smooth, seeking the help of an expert can make things easier. Given the circumstances, going to the municipal office in person to resolve tax filing issues is not advisable, so till the online mechanism is fixed by the respective authorities, taxpayers have little else to resort to.