Property tax: Khairtabad zone pays highest, Charminar zone lowest, reveals RTI

Hyderabad: An RTI reply has revealed that the Khairtabad zone pays the highest property tax while the Charminar zone pays the lowest.

The data has kicked off a controversy in Hyderabad. Taxpayers are asking why a particular zone is being ignored.

Greater Hyderabad Municipal Corporation (GHMC) collects property tax to fund city infrastructure initiatives like parks, roads, commercial complexes, and so on.

When compared to previous years, especially during the pandemic period, which saw a shutdown for two consecutive years, there has been a significant increase in property tax collections.

Property tax receipts in 2018-19 and 2019-20 were Rs.1295 crore and Rs.1362 crore respectively. The collections in 2020-21 and 2021-22 were Rs.1730 crore and Rs.1493 crore, respectively.

Homeowners are active contributors to the city's development. They contribute to the State government's revenue by paying an annual property tax to the Greater Hyderabad Municipal Corporation (GHMC).

GHMC charges a property tax on both residential and commercial properties and uses the proceeds to maintain the city's roads, sidewalks, parks, and other infrastructure.

“I filed an RTI application with the Public Information Officer of the Greater Hyderabad Municipal Corporation of Hyderabad to learn about the property tax, professional tax, and advertisement tax collected by municipal authorities in various zones of the GHMC beginning in 2018. According to the table, Khairtabad Zone has paid the highest property taxes, while Charminar Zone has paid the lowest. In my opinion, it is because Khairatabad contains the most large-scale commercial buildings. It can also be assumed that many people from Charminar do not file their taxes” said Kareem Ansari from Yourti.in portal.

How is property tax calculated in Hyderabad?

The first is to determine the plinth area. It is the total built-up area that includes balconies and verandahs. If you have a self-occupied home, find out the market average per-square-foot rent for the Monthly Rental Value (MRV). If you rented it, the MRV per square foot is the rent specified in the rental agreement.

The formula for property tax calculation is the following:

Annual property tax (residential) = Gross Annual Rental Value (GARV) x [(17 to 30 percent) Tax rate as per slab which is based on MRV – 10 percent depreciation] + 8 percent library cess

GARV = Plinth area x [MRV (in Rs/sq ft) x 12]

Property tax on commercial property = 3.5 x Plinth area x MRV

GHMC Property Tax slabs

What are the exemptions offered in property tax?

Several categories of property are excluded from paying property tax. These properties are classified based on their rental values as well as whether they have a government-approved special status. The following are some examples of tax exemptions:

Properties that command a monthly market rental value of up to Rs 50

If an ex-military serviceman owns the property

Property owned by charitable organizations

Places of worship

Schools, up to class X, recognized by the Central Board of Secondary Education (CBSE) and other educational boards

Homes left as ‘vacant premises’ by the owner get a 50 percent concession on the property after an audit by the tax inspector

Property tax rebates

The GHMC holds a taxpayer lottery in which one lucky person who pays their taxes on time and enters the contest is eligible to win Rs 20 lakh.

Owners of buildings with a rainwater collection system and solar-powered appliances obtain tax breaks to promote "green buildings."