What exactly is Land Tax?
When intending to buy a land/plot or a developed property, it is essential to consider extra charges like stamp duty and registration fees to properly handle money. Land tax, on the other hand, is a regular expenditure that is paid bi-annually or annually. As a result, it must be completely comprehended before making a real estate commitment.
Land tax, often known as property tax, is a levy payable on the acquisition of a property that encompasses all manmade immovable developments such as buildings, factories, and god owns. Contrary to what the name implies, empty land is exempt from the land tax.
The technique for assessing land or property tax differs by state.
Who is responsible for paying the land tax?
The tax charged by the municipal authority or Municipal Corporation of the city is paid by the landowner/co-owners. However, the fee levied varies by state. Furthermore, numerous additional variables influence the land tax, including:
- The land’s location
- The land’s size/area
- Gender, since female owners receive discounts
- Age, because older citizens are eligible for refunds.
- Services offered by the local government
Significance of land tax
The municipal body’s land tax money can be used to provide important services in the area where the site is situated, including cleaning, road repairs, transportation, sewage, and other civic amenities. The tax collected assists the authority in funding all of these services and maintaining the area’s infrastructure. If dues are not paid, the local government might take legal action to recover the money and reduce the delivery of critical public utilities and electricity.
Furthermore, tax receipts are important in the event of a legal dispute. Because only the owner/co-owners are obligated to pay the land tax, the certificate obtained in place of dues paid can be used to demonstrate legal possession of the property. A tax receipt is also a necessary document by a bank when applying for a loan. As a result, timely payment of land tax is critical.
Important factors to consider
- If paid in a single instalment before the deadline, a 5% discount on the total tax can be obtained.
- It is critical to creating a challan for each preceding year when making any arrears or earlier payments.
- In the case of a tax payment default, the system will automatically compute interest at a rate of 2% per month for the defaulted period.
- A receipt can be issued promptly if the payment is made in cash or by Demand Draft (DD). However, if the payment is made by cheque, the acceptance or receipt can be obtained only once the cheque amount has been realised.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.