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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.

FORMULA TO EVALUATE PROPERTY TAX ON RESIDENTIAL AREA:

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.(..Contd.)

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