The Commissioner and Director of Municipal Administration (CDMA) is the main entity responsible for the property tax systems all through the state of Telangana. Property tax being the basic source of revenue, is the mainstay of the urban infrastructure and its maintenance. These revenues are used for supply of water, drainage, sanitation, and conservation of public places like parks and roads.
Property owners in Telangana need to know the CDMA property tax system to avoid penalties and to make sure that their payments are assessed correctly. The Telangana CDMA property tax system is a legal framework based on the Telangana Municipalities Act, 2019, and has a self-assessment mechanism for the convenience of taxpayers. Being abreast of regulations and the calculation of the tax would greatly help property owners in getting their work done easily.
What Is Telangana CDMA Property Tax?
CDMA property tax is a legal tax levied on parcels of land that fall under the jurisdiction of urban local bodies (ULBs) in the state of Telangana. Taxes are imposed each year on these parcels of land. The main objective is to accrue revenue to subsidise urban public services and development projects to improve the citizens’ urban living conditions. Property taxes pay for municipal services that keep urban life operational, such as street repairs, garbage collection, water service, and street lighting. These services are all basic services provided to urban residents and relate directly to the quality of life.
This system is premised on creating a self-sustained business model for municipalities whereby the citizens residing in that municipality fund the municipality. In other words, municipalities become self-reliant on their own citizens so that they can build better public infrastructure and public service offerings. Property taxes are calculated methodologically based upon either the Annual Rental Value (ARV) or Capital Value (CV), both of which are the two main property assessment methods utilised in assessing a property in the state of Telangana.
Understanding Your Property Tax Identification Number (PTIN)
What Is PTIN?
A Property Tax Identification Number (PTIN) is a number assigned to identify each individual property under the CDMA system. The PTIN is the foundation of the property tax records and provides information regarding each property, ensuring that property records are tracked individually, allowing tax officials and property owners to verify assessment records, property tax receipts and payment history. The PTIN is critical throughout the tax cycle from assessment to payment.
The PTIN links together important characteristics about each property such as the ownership, location, area, type, and the tax rate applicable. Tax authorities would not be able to keep track of a property’s tax status and payment history without the PTIN to assist in administrating their property tax program.
Locating PTIN
- Existing Documents: Property owners can locate the PTIN on their previous property tax receipts or the assessment notice issued by the local ULB. It is typically mentioned under the heading of ‘Property Identification Number’.
- Online Portal: Owners of the property can navigate to the official Telangana CDMA portal and enter the address of the property or owner information to obtain the PTIN. This option is convenient and allows users to access the PTIN quickly and efficiently.
How Telangana CDMA Property Tax Is Calculated
Assessment Methods
The tax for any property in Telangana is assessed based on one of two methods: the Annual Rental Value (ARV) method or the Capital Value (CV) method.
- Annual Rental Value (ARV): ARV is calculated based on the annual rental ability of the property. It is common for residential properties to have tax calculated per ARV because it relates more closely to possible rental income of a property. ARV uses factors such as location, square footage, and amenities to determine a market fair rental value.
- Capital Value (CV): CV is calculated based on the market value of a property. The CV method is usually applied for commercial properties as the CV amount is derived from market value of like properties and the prevailing market price. Property taxes based on the CV method generally yield a higher amount as their market value is almost always greater (more than) than their rental value.
Tax Rates
The tax rates are not fixed and vary depending on the type of property and its location. For instance:
- Residential Properties: The tax rate for residential properties typically ranges from 0.1% to 0.5% of the ARV.
- Commercial Properties: Commercial properties attract higher tax rates, often between 0.5% to 2% of the ARV or CV, depending on the property’s market value.
The rates vary across different ULBs within Telangana to account for local factors such as infrastructure, demand for space, and development level.
Additional Charges
Apart from the base property tax, property owners in Telangana may also be required to pay additional charges. These can include:
- Library Cess: A small levy used to fund public library systems.
- Water Charges: A charge for municipal water supply, often incorporated into the property tax bill.
- Street Lighting Charges: A fee for the upkeep of public street lighting systems.
These charges are typically calculated based on the size of the property or its annual rental value.
Property Tax Assessment for New Properties
Self-Assessment Procedure
If the property is new or modified, the owner is required to provide a self-assessment of the property for tax determination. This self-assessment will require the property owner to estimate their property’s annual rental value or its capital value based on their knowledge of their own property and property’s like-kind in the local area.
This approach encourages property owners to comply with the tax regulations and will benefit the property owner to provide accurate and honest details of the property – including details of the property in terms of size, built-up area, property type, and location.
Required Documents
At the time of submitting a self-assessment request, the property owner will provide:
- Title deed or sale agreement: Legal document that proves who owns the property.
- Occupation certificate: Used by the local ULB as confirmation that the property is ready for occupation.
- Property measurement list: The details related to property measurements will help establish the area of the property for tax determination.
- Aadhaar Card and PAN Card: These serve as identification proofs for the property owner.
Failure to provide the necessary documents can result in delays in property tax assessment.
Unassessed Properties
In cases where a property has not yet been assessed for tax, the owner must approach the local ULB to initiate the assessment process. The ULB will then send a tax assessment officer to inspect the property, after which the property’s tax liabilities will be determined.
How to Pay CDMA Property Tax: A Step-by-Step Guide
Online Payment
- Visit the Official Portal: Go to the official Telangana CDMA website and log in using your PTIN or property details.
- Self-Assessment: Choose the property for which you want to pay the tax and perform a self-assessment (if it’s required and not already done).
- Payment Calculation: Once the tax is calculated, proceed to the payment section. Here, you will see the total tax due for the property.
- Choose Payment Method: There are respective payment options for debit/credit card, net banking, or UPI.
- Confirm Payment: After verification of the details, make the payment. Payment will be confirmed and a receipt will be issued, which can be downloaded in case you need it in the future.
Offline Payment
Property tax can also be paid at any authorised center, such as ULB counters or Mee Seva centers. Payments made through these outlets can be tracked using the PTIN for verification.
Receipt Download
Once the payment is made, the official receipt can be downloaded from the portal for the purpose of record keeping. The receipt will serve as proof of payment and is required if you want to look back in any future property tax referencing situations.
Mutation: Transferring Property Ownership in Records
Importance of Mutation
Mutation is a crucial process for transferring property ownership records in municipal databases. It ensures that the new owner’s name appears on the property tax records, making them liable for future tax payments. Without a mutation certificate, the previous owner remains legally responsible for the property tax, even though they may no longer own the property.
Application Procedure
To apply for mutation, the new property owner must submit an application to the local ULB office. The following documents are required:
- Sale Deed: A copy of the sale deed or agreement that proves the transfer of ownership.
- Property Tax Payment Receipts: Proof that the tax has been paid for the current financial year.
The ULB will then verify the documents and update the property records accordingly.
Due Dates, Rebates, and Penalties
Due Dates
Property taxes are due for payment by April 30 of each year. Payments made after this date attract penalties.
Rebates
Property owners can avail of early payment rebates. For instance, a 5% rebate is provided for those who settle their tax dues before the due date.
Penalties
A penalty of 2% every month is applied if tax amounts are left unpaid. If property taxes are not paid on time, interest and penalties will accrue and result in a larger outstanding amount.
Handling Grievances and Corrections
Reporting Discrepancies
Property owners need to report any errors in their tax bills, for example, incorrect property details and/or tax calculation errors, to the local ULB office to remedy the issue. The grievance redressal procedure can also be done online.
Grievance Redressal Mechanism
The state of Telangana offers a simple grievance redressal mechanism, via its official CDMA portal. Property owners may complain of tax discrepancies, incorrect valuations and other aspects about the bill they find problematic, and follow-up on their case.
Conclusion
Following the CDMA property tax laws is an important civic duty every property owner must undertake in Telangana. If the property owner knows the methods of tax calculation, how to pay the tax, and deadlines; then it makes it easier for them to comply with the CDMA and live within Telangana’s systems of property taxes.
Apoorva H P Achar