FOREWORD

The Unit Area Method of Property Tax is being implemented from 1^st April 2004. This is a historic reform in the administration of property tax laws and is designed to be citizen friendly, transparent, easy to calculate and promote honesty in the citizen-civic body interface. This reform will have a beneficial impact on the growth of urban property in Delhi and enable the Corporation to provide better services to the people. The main thrust of the new amendments to the Property Tax provisions of the DMC Act (as amended in 2003) are as follows.

Onus of payment of property tax is on the citizen, like in the Income Tax Act.

It is a computerised system driven by a software, which will enable the citizen to interact with the MCD on its website www.mcdonline.gov.in.

It gives concessions to the elderly, women, handicapped persons and ex-servicemen.

It provides for a Hardship and Anomaly Committee to settle grievances.

It provides for a Tribunal to settle disputes rather than resort to litigation in courts.

It is stable for three years and is to be revised every three years based on the recommendations of a Municipal Valuation Committee as per the amended provisions of the Act.

There is an extensive process of public hearings and dispute resolution which is a part of the new system.

The Unit Area System has worked very well in other cities like Ahmedabad, Patna, Bangalore, Chennai, and Hyderabad apart from many other cities. Hence there is a lot of experience in its efficient working. I hope the citizens will find this new system more transparent, reliable, hassle-free and efficient. This guide has been prepared to help Delhiites to file their Property Tax under the new system on time. Taxes can be paid online, at the Citizen’s Service Bureau located in each zone or in the property tax offices of the Corporation. Please pay your tax and help us to serve you better!

11^th March 2004 Rakesh Mehta

New Delhi Commissioner MCD

I N D E X

Sl. No.	Subject	Page No.
1	Introduction	1
2	System of Assessment	1
3	Determination of Annual Value	1
4	Calculation of Covered Space	1
5	Unit Area Values	2
6	Multiplicative Factors	2
7	Unit of Assessment	3
8	Assessment & Calculation of Tax	4
9	Revision of Assessment	5
10	How to pay your tax?	5
11	Exemptions & Concessions	5
12	Special Categories	7
13	Transitory Provisions	8
14	Recovery of Tax	9
15	Punitive Provisions	9
16	Appeal	10
	ANNEXURES
I	Self-assessment Form
II	List of Colony Categories
III	Definition & Estimation of Covered Space
IV	Ready Reckoner & Illustrations
V	Definitions of Use
VI	Addresses of CSBs & Offices of A&C Deptt.
VII	Category-wise list of Urban Villages

UNIT AREA SYSTEM OF PROPERTY TAX ASSESMENT

1. INTRODUCTION OF UNIT AREA SYSTEM

Prior to the amendment in DMC Act, 1957 by the Delhi Municipal Corporation (Amendment) Act, 2003, properties were taxed on the basis of the annual rent at which such land or building was reasonably expected to be let out from year to year basis. The above system of determining property tax became questionable on various grounds primarily on inequity since it created wide disparity in property tax of similarly placed properties in the same locality, subjectivity in assessments and excessive litigation.

2. NEW SYSTEM OF ASSESSMENT

The unit area based system, which was notified and came into force from the 1st of August 2003, will be implemented from 1st of April 2004. Property owners can self-assess their tax and submit the returns in the Form given at Annexure I. The area-based method is simple, arithmetical and transparent. It is based on fixing a unit area value per square metre of covered space for calculation of property tax. The tax for a particular property is based on the annual value of the property arrived at by multiplying unit area value assigned to the colonies/localities by the covered area of the property and the multiplicative factors for occupancy, age, structure and use.

3. DETERMINATION OF ANNUAL VALUE

The annual value of any covered space of building shall be the amount arrived at by multiplying the total covered space of the building by the corresponding unit area value of the category in which the colony/area/locality is situated as given in Annexure II and the relevant multiplicative factors. In case the name of any colony/area/locality does not figure in the list, the categorization of such colonies shall be done by the Corporation according to the general guidelines laid down in this regard. In the meantime, the tax thereof may be calculated based on the categorization of the highest neighboring colony.

4. CALCULATION OF COVERED SPACE

The method of calculation of covered space is explained in detail in Annexure III. A list of architects registered with the Corporation who can be contacted for measurement and certification of the covered area in case the covered area is not readily available has been placed on the website of the Corporation www.mcdonline.gov.in. Such architects can be paid a negotiable fee @ 10% of the tax of the property measured and certified by them. For plots below 100 sq. mtrs. the property tax is to be calculated by taking the covered area as given in the table at Annexure-IV. A ready reckoner for calculation of property tax from covered area up to 100 sq. mtrs. is given at Annexure IV-A & IV-B. The tax can be calculated after multiplying the factors and deducting the rebates as admissible.

5. UNIT AREA VALUES

6. MULTIPLICATIVE FACTORS

A. Structure Factor (SF)

Structure type	Pucca	Semi Pucca	Kuchcha
Factor (SF)	1.0	1.0	0.5

Pucca: buildings with load bearing roof

Semi-Pucca: buildings having a non-load bearing temporary roof

Kuchcha: buildings using temporary material for wall & roof

B. Age factor (AF) – For rebate on age of buildings

Year of completion	Prior to 1960	1960 to 1969	1970 to 1979	1980 to 1989	1990 to 1999	2000 onwards
Factor (AF)	0.5	0.6	0.7	0.8	0.9	1.0

C. Occupancy factor (OF) – For tenanted properties

Category	A	B	C	D	E	F	G	H
Factor (OF)	2.0	2.0	2.0	2.0	2.0	2.0	2.0	2.0

D. Use factor (UF)For Non-residential uses:

Use	I	II	III	IV	V
Factor (UF)	1	2	3	4	10

(I)Public Purpose (II) Public Utility (III) *Industry, Entertainment, Recreation and Clubs (IV) Business, Restaurants, Hotels upto 2 Star (V) 3 Star and above Hotels/ Towers/Hoardings

* Only for the space actually used for manufacturing activity. Other space like office or residential quarters, etc. shall attract the factor(s) as applicable to them. Definitions of use-wise categories of buildings as notified in the Property Tax Bye-laws 2004 is given in Annexure-V.

7. UNIT OF ASSESSMENT

1. Every building and every vacant land shall be assessed as a single unit. However where portions of any building or vacant land are separately owned so as to be entirely independent and capable of separate enjoyment, notwithstanding the fact that access to such separate portions is made through a common passage or a common stair case, as the case may be, such separately owned portions may be assessed separately.

2. All buildings, to the extent they are contiguous or are within the same connectedness or are on the same foundation and are owned by the same owner or co-owners as an undivided property, shall be treated as one unit for the purpose of assessment. However if any such building is sub-divided into separate shares which are not entirely independent and capable of separate enjoyment, the Commissioner may, on application from the owners or the co-owners, apportion on the payment of a fee of Rs. 100 the valuation and assessment of such building among the co-owners according to the value of their respective shares, treating the entire building as a single unit

3. Each residential unit with its percentage of the undivided interest in the common areas and facilities, constructed or purchases and owned by, or under the control of, any housing co-operative society registered under any law regulating co-operative housing for the time being in force, shall be assessed separately.

4. Each apartment and its percentage of the undivided interest in the common areas and facilities in a building within the meaning of any law regulating apartment ownership for the time being in force, shall be assessed separately.

5. If the ownership of any vacant land or building or any portion thereof is sub-divided into separate shares, or if more than one adjoining vacant land or building or portion there of comes under one ownership by amalgamation, the Commissioner may, on an application from the owner or the co-owner, as the case may be, separate, or amalgamate, as the case may be, such vacant land or building or portion thereof..

6. Notwithstanding any assessment made in respect of any vacant lands or buildings before the commencement of the Delhi Municipal Corporation (Amendment) Act, 2003, the Commissioner may, on his own or otherwise amalgamate, or separate, or continue to assess, such vacant lands or buildings or portions thereof.

7. The Commissioner shall, upon an application made in this behalf by an owner, lessee, sub-lessee, or occupier of any vacant land or building and upon payment of such fee as may be prescribed in the bye-laws, furnish to such owner, lessee, sub-lessee, or occupier, as the case may be, information regarding the apportionment of the property tax on such vacant land or building for the current period assessment or for any preceding period of assessment.

8. REBATES & CONCESSIONS

a) Rebate for Senior citizens, women owned properties, physically challenged persons and ex-servicemen: A rebate of 30% of the tax due on the covered space of such building up to one hundred sq.mtrs. of the covered space has been allowed by the Corporation in the case of any self-occupied residential building singly owned by a man who is sixty-five years or more in age or by a woman irrespective of her age, ex- servicemen or a physically challenged person as defined in the bye-laws, irrespective of age, or jointly owned by any of these categories. Such rebate shall not be available for more than one residential building within the jurisdiction of National Capital Territory of Delhi

NB: Only one Rebate can be availed even if a person is eligible for more than one rebate/concessions as listed above. Rebate/concession is only available for self-occupied portion of the premises. For the purpose of the above rebate a senior citizen means a person above the age of 65 years: a physically challenged person means a person with disability (equal Opportunities, Protection of Rights and Full Participation) Act, 1995, (1 of 1996) who has been issued a certificate by the prescribed authority under the said Act.

b) Rebate for Timely Payment:

(i) The payment of tax due in lump-sum in one installment during the first quarter of the year, (i.e., April – June) would entitle one to a rebate @ 15% of the tax paid.

(ii) No rebates would be given on payments made in quarterly installments.

(iii) Late payment invites penal interest @ 1% per month or part of the month after the due date of each quarter in which the tax was due.

c) Concession for small flats: A factor of 0.9 would be applied to the annual value of the flats whose total covered area (including common areas) is 50 sq. mtrs. or less.

9. SELF-ASSESSMENT AND CALCULATION OF TAX UNDER UNIT AREA METHOD

In the old system of property taxation the onus for raising demand rested with the Corporation and unless a demand was raised and bill issued, the owner was not liable for payment of the property tax. In the new system of property taxation, concept of self-assessment has been introduced for the first time whereby, the onus for filing returns and paying taxes will be of the owner or occupier as the case may be. Property tax can be self assessed by the individual property owners or by any other person liable to pay the tax in the following manner:-

Step 1: Measure the covered area of the property

Step 2: Take the unit area value of the locality/category notified by the Corporation.

Step 3: Calculate the annual value by using the following formula:

Annual value = Unit Area Value X Covered Area X Multiplicative Factors

[ OF AF, SF, UF]

Step 4:In cases where different portions of property are put to different uses or where the other parameters like concessions/rebates applicable are different, the annual value will be calculated for each such portion separately.

Annual Value (AV) = (AV of Portion 1) + (AV of Portion 2) + …………….

Step 5:Calculate tax by multiplying the above value by the respective rate of tax as notified by the Corporation for the year 2004 - 2005. From this deduct any rebates or concessions applicable.

Tax = (Annual Value X Rate of Tax) Minus Rebates/ Concessions applicable

The Rates of tax for respective categories are as under:

A) Residential Properties

• 10% for categories A to E

• 6% for Categories F to H

B) Non Residential Properties

• 15%

C) Three Star & above Hotels/Towers/Hoardings

20%

Some examples of tax-computation are given at Annexure IV-C.

The above self-assessment shall be treated as assessment for the purposes of the Delhi Municipal Corporation Act, if the Commissioner does not issue any notice under section 123 C of the Act within twelve months after the year to which such self-assessment relates.

10. HOW TO PAY YOUR TAX

The tax calculated by you can be paid in two ways:

(i) In lump-sum in one installment during the first quarter of the year i.e. April – June, or

(ii) In quarterly installments staring first April as follows:

· Quarter 1 - 1st April to 30th June

• Quarter 2 - 1st July to 30th September

• Quarter 3 - 1st October to 31st December

• Quarter 4 - 1st January to 31st March

No rebates would be given on payments made in quarterly installments. Late payment invites penal interest @ 1% per month or part of the month after the due date of each quarter in which the tax was due.

You can file your self-assessment return in the Form given in Annexure I and pay the tax calculated by you online through the MCD website www.mcdonline.gov.in or in any of the computerized Citizens Service Bureaus in each of the zonal offices of the MCD or in the offices of the Assessment & Collection Department whose addresses are given at Annexure VI.

11. REVISION OF ASSESSMENT

ANNEXURES