A guide to paying property tax in Kolkata

Property tax is a recurring charge that home owners have to pay every year. However, the tax amount varies from one location to another. This is a guide to paying property tax in Kolkata

Owners of residential properties in Kolkata, are liable to pay property tax to the Kolkata Municipal Corporation (KMC) every year. The municipality uses the funds collected as property tax, to provide important civic facilities and services.

On December 15, 2016, the Kolkata Municipal Corporation (Amendment) Bill 2016 was passed, to simplify the assessment and collection of property tax and make the entire process more transparent. It empowered the KMC to limit the increase and decrease in property tax, to a certain extent and also enable self-assessment of one’s property tax.

 

How to calculate property tax for a residential property in Kolkata

In March 2017, the new Unit Area Assessment (UAA) system for property tax calculation, was passed in the KMC. This enabled property owners in the city to calculate their tax themselves, thereby, removing any subjectivity or ambiguity that existed under the earlier Annual Rateable Value system.

Under the UAA system, the entire city of Kolkata is divided into 293 blocks. These blocks are classified into seven categories (A, B, C, D, E, F and G), on the basis of the market value, infrastructure, facilities, etc., available in each block. For each category (A, B, C, etc.) an annual value per sq ft, known as the Base Unit Area Value (BUAV) is assigned. Category ‘A’ has the highest BUAV and ‘G’ the lowest. This ensures that all the properties that fall under the same category or lie within the same block, are taxed equally. An assessee needs to pay only for the area that he or she lives in and not for adjacent areas like gardens.

See also: Property Tax Guide: Importance, Calculation and Online Payment

To simplify property tax assessment even further, ‘bustee’/slum/’thika’-tenanted areas are categorised as ‘G’, irrespective of their geographical location under any block. Additionally, all recognised RR colonies*, including settlements under government-notified EWS and BSUP (Basic Services for Urban Poor) Schemes, are categorised as ‘E’, irrespective of their geographical location under any block, unless they belong to a block that is categorised lower than ‘E’.

(* RR Colonies refer to refugee rehabilitation colonies, including slum settlements that are spread all across the city.)

The property tax calculation also utilises the concept of multiplicative factors (MFs), to account for the many critical differences in houses within the same block. MFs would account for variations in terms of the purpose of use, location of the property within the block, the age of the property, nature of occupancy and type of structure. These factors are clearly notified and used to increase or decrease the BUAV of different properties, as applicable.

Thus, the annual property tax under the UAA system is calculated, using the following formula:

Annual tax = BUAV x Covered space/Land area x Location MF value x Usage MF value x Age MF value x Structure MF value x Occupancy MF value x Rate of tax (including HB tax)

(Note: HB tax refers to Howrah Bridge tax, which is applicable on properties lying in specific wards.)

The relevant BUAV and MF values for calculating tax on your property, are notified on the KMC website, in the ‘Scheme’ section.

Kolkata Municipal Corporation – https://www.kmcgov.in/KMCPortal/jsp/KMCPortalHome1.jsp

Ensure that your record in the system is updated and no outstanding amounts are shown against your account. If there are any errors, have them corrected immediately.

 

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