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How Property Tax in Punjab would be calculated : Govt. clarifies formula

property-taxChandigarh, June 18, 2013 (YP Bureau)

Accruing a major relief to the residents of the state, the Punjab Government has reduced the rates of property tax and giving the right of self-assessment instead of previous provision of government assessment. New rates would immediately come into effect after the ordinance in this regard. It is pertinent to mention here that the Punjab Cabinet had already given green signal to amend the Punjab Municipal Act 1911 and the Punjab Municipal Corporation Act 1976, in accordance with the recommendations of the Cabinet Sub Committee regarding the imposition of Property tax in the state.

Disclosing the formula of annual value of property on which tax would be imposed; an official spokesperson of the state government said that for example if any person having 200 square yard plot and of Rs.20 lakh collector rate and 100 square yard (900 square feet) constructed area then he would only have to pay Rs.601. He said that to devise formula for evaluation of property tax, collector rates would be added in the construction area cost. He further said that Rs.500 per square feet has been fixed for construction area cost. He said that 10 per cent would be reduced as depreciation charges from the total cost including construction area cost and 5 per cent of the actual obtained amount would be considered as annual value of the property. He said that 0.5 per cent tax would be levied on the annual value of the property, which becomes Rs.601.


Collector rate of property + construction cost (Rs. 500 per square feet on covered area)- Depreciation (10 per cent of construction cost)=total cost

5 per cent of total cost would be considered as annual cost and 0.5 per cent tax would be imposed on the annual cost.



5 per cent of Collector rate of vacant plot would be considered as annual cost and 0.5 per cent tax would be imposed on the annual cost for the vacant plot between 100 to 500 square yards.


7.5 per cent annual tax would be imposed rented residential property and 10 per cent for rented commercial, industrial and organizational property.

He said that from the earlier house tax of 15 per cent of the annual rental value for the commercial rented property, the rates have been drastically reduced to 10 per cent and for rental  residential property tax rates have been brought down from earlier 10 per cent to 7.5 per cent annually.

Similarly, for non- rented commercial property, the rates have been reduced from earlier 15 per cent to 3 per cent of the annual value.  For self occupied houses up to 50 square yards, a consolidated Rs.50 per year would be charged and for houses between 50 to 100 square yards, the annual consolidated tax of Rs.150 would be charged.

He said that for self occupied house having area between 100 to 500 square yards, the property tax @ 0.5 per cent of the annual value and for self occupied residential above 500 square yards, a tax @ 1 per cent of the annual value would be charged. For vacant plots and un-utilized buildings and plots the property tax would be @ 0.20 per cent of the annual value.

The spokesperson further said that all religious institutions, cow shelters, care centre for stray animals and charitable institutions besides freedom fighters and people living below the poverty line have been totally exempted from property tax. He further said that widows and the differently-abled persons have been given a rebate up to Rs.5000 from property tax. Clarifying this, he said that if a widow/differently-abled person was to pay Rs.6000 as property tax, she/he would be liable to pay only Rs.1000 after rebate of Rs.5000.  He said that all the educational Institutions, which were not even covered under charitable institutions, have now been provided 50 per cent rebate on the property tax.


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