Jammu: All J&K residents in municipal areas will have to shell out tax at the rate of 5 percent and 6 percent of Taxable Annual Value (TAV) on their residential and non-residential properties respectively from April 1, 2023.
However, no tax will be levied on the vacant lands, not appurtenant to a structure or building; the properties of the Municipality; all places of worship; cremation and burial grounds.
All properties owned by the Government of India and the UT government will also be exempted from payment of Property Tax. However, service charge at the rate of 3 percent of the Taxable Annual Value will be payable to the Municipality in respect of such properties.
All these guidelines formed part of Jammu and Kashmir Property Tax (Other Municipalities) Rules, 2023, notified this evening by the Principal Secretary to the Government Housing and Urban Development Department (HUDD) H Rajesh Prasad.
Notification though ended suspense maintained by the UT administration for months now over this move yet added to the persisting disquiet and apprehensions of the sections to be taxed.
The rules for levy, assessment and collection of property tax in the Municipalities and Municipal Councils of Union Territory of Jammu and Kashmir have been notified by the government in exercise of the powers conferred by Section 71A of the Jammu and Kashmir Municipal Act, 2000, read with Sub-Section 1 of Section 65 and Sub-Section 1 of Section 73. They will come into force from April 1, 2023.
As per the rules notified, the Taxable Annual Value (TAV) of a property under the Act and the property tax due thereon for a financial year will be calculated in accordance with the formula which will take into account Municipality Type Factor; Land Value Factor; Area Factor; Floor Factor; Usage Type factor; construction type Factor; Age Factor; Slab Factor and Occupancy Status Factor.
In case of Municipality Type Factor (MTF), the value to be computed in the formula for Municipal Council will be 0.75 and for Municipal Committee, it will be 0.5.
The property tax calculated in respect of a building will hold for a block of three years unless any change to such calculation is necessitated on account of the circumstances envisaged in the Act for allowing revision in such calculation. The first block will commence from April 1, 2023, and will continue to remain in force till March 31, 2026. The blocks will be similarly calculated thereafter.
“New buildings coming up after the commencement of the block shall have their property tax liability calculated with reference to the first day of the relevant block, and irrespective of their having completed three years, their liability to tax shall be calculated anew from the date of commencement of the new block of three years for the Corporation as a whole,” the rules specified.
In case a building is liable to property tax for only a part of the year, the tax due will be proportional to the number of completed months and parts of the month not completed will be ignored.
As per the rules, a person liable to property tax will furnish to the Executive Officer or any officer authorized by him in this behalf the particulars of the property and the tax due thereon in Form-1 by May 30 of the financial year to which the return pertains. A copy of the acknowledgment along with the proof of payment of the second installment of tax will be furnished by November 30 in cases where the payment is made in two installments.
PENALTY
Failure to file return in due time, unless prevented by sufficient cause, will without prejudice to the interest due for delay in payment, make the person from whom it is due liable to a penalty of Rs 100 or 1 percent of the tax due, whichever is higher, for every month of default. The maximum penalty will not exceed Rs 1000.
EXEMPTIONS
Vacant lands, not appurtenant to a structure or building will be exempted from property tax if there’s a Master Plan in force in the area, under which any construction or development on such vacant land is disallowed or if they have been put to agricultural use as per 6-monthly cropping surveys of the Revenue department.
Similarly, all the properties of the Municipality and all places of worship, including temples, masjids, gurudwaras, churches, ziarats, etc and cremation and burial grounds will be exempted from payment of property tax.
USAGE OF FORMULA
In formula, Land Value Factor is one tenth of the unit area value of land in Rs lakh per kanal of land as notified under J&K Preparation and Revision of Market Value Guideline Rules, 2011 as on April 1 of the base year of that block of three years for the first block from April 1, 2023 to March 31, 2026, if the per kanal value of land as on April 1, 2023 as per the aforementioned value guidelines is Rs 60 lakh, it be entered as 6 in the above calculation and will continue to be entered as 6 during the three financial years of the block.
Area Factor is the built area or the vacant area in respect of which the tax liability is being calculated, as the case may be, in square feet. In the case of Property tax on built area, it refers to the total covered area of that floor in square feet. In case of areas with winter snowfall, the area of the attic will not be counted in built-up areas. In the case of Property tax on vacant land not appurtenant to a building, the area of the vacant land in square feet will be entered. In the case of Property tax on vacant land appurtenant to a building, the area to be entered in the formula will be the area, in square feet, in excess of two times the built-up area of the ground floor.
For calculating the liability of different floors and vacant land abutting the building, the floor factor will be entered in the formula.
Under Usage Type Factor, where different portions of a building are put to different uses, property tax for the built-up area as well as the taxable vacant appurtenant area will be separately calculated, proportionately, for each area under a particular use. The value to be entered in the formula for different usage types will be for Residential apartment or flat 2; residential house 2.5; Industrial (Manufacturing) 5; Institutional/Public/Semi Public 7; Commercial, except 3 star and above hotels, towers & hoardings 12 and 3 star and above hotels, towers & hoardings 15.
The value for age factor will be for 0-20 years old -1.00; 20-30 years old -0.90; 30-40 years old – 0.80; 40-50 years old – 0.70; 50-60 years old – 0.60 and more than 60 years old 0.50.
In case of Occupancy Status, the value for built-up properties under Self-occupied for more than 6 months category will be 0.75 and for others it will be 1.0.