All property owners, be it residential, commercial, or industrial, are liable to pay property tax to the municipal corporation of the area. This tax is the major source of revenue for the organisation and used for building the infrastructure and other facilities in the area.
What is commercial property tax?
Commercial property tax is paid for the commercial use of a property. A person should pay commercial property tax for the property he/she owns and uses or rents to others for running businesses.
Factors that determine commercial property tax calculation
Commercial property tax is calculated based on the following factors:
- Property location
- Carpet area of the property
- Floor space index
- Age of the property
- Number of floors in a property, whether independent, single storey, multistorey, etc.
- Property occupation type — self-occupied, rented, or vacant
- Property’s commercial usage
- Amenities associated with the property
- Solar energy
- Rainwater harvesting
How is commercial property tax calculated?
- Unit area value system: First, the per unit area of the total carpet area or built-up area is known. The expected returns are calculated based on this. The commercial property tax is calculated based on these findings.
- Capital value-based system: The market value of the commercial property is calculated and based on this the property tax is calculated. The market value of the property is determined by the property’s location and type.
- Annual rental value system: In this method, the property tax is calculated based on the rent earned from the commercial property. The rent will be decided based on location, amenities, size of the property, etc.
Further, the municipal corporation of the area, where your property located, may have the commercial property tax calculator that you can use to get an approximation on the commercial property tax amount to be paid.
How to pay commercial property tax offline?
- To pay the commercial property tax offline, you have to visit the ward office of the municipal corporation.
- Carry supporting documents.
- Fill in the form, submit the supporting documents, and make the payment via cash, cheque, or any other mode.
- Once payment is done, collect the challan for the payment of the commercial property tax.
How to pay commercial property tax online?
- Login to the municipal corporation website of the location, where you have to pay the commercial property tax.
- Click on pay property tax.
- Choose the form 4 or form 5 that should be filled based on documents that have to be provided.
- Select the year for which you are paying the property tax. If you have any pending property tax amount, you may select the year and pay. Also, check if you can make use of any amnesty scheme being provided for payment of the commercial property tax.
- Enter property details and click on submit and proceed with the payment that can be done using credit card, debit card, internet banking, or e-wallet.
- After the payment is done, you can print the challan for payment of the commercial property tax.
FAQs
Who decides how much commercial property tax has to be paid for a property?
The state government decides the commercial property tax amount, and it will be collected by the municipal corporations of the area.
What is the property tax on commercial properties in Mumbai?
The property tax on commercial properties in Mumbai is around 22% of the total property revenue.
What is commercial property tax?
It is the tax paid for using the property for commercial uses.
Is commercial property rent taxable?
Any amount received as rent through a commercial property is taxable.
Can we use residential properties for commercial use?
A residential property can be used for commercial use if the society and zoning rules permit.
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