All about MCGM Property Tax in Mumbai

Property tax, also known as municipal or house tax, is an essential component of the Indian taxation system and one of the major sources of revenue of the governing bodies. In India, the local municipal authority is responsible for evaluating, imposing, and collecting the property tax to maintain and upkeep local civic amenities.

To make the process of paying taxes hassle-free, we have come up with a complete guideline of MCGM property tax.

Wondering what MCGM property tax is? Read along!

MCGM Property Tax- In a nutshell

The Municipal Corporation of Greater Mumbai (MCGM), previously known as the Brihanmumbai Municipal Corporation, is the governing civic organisation of Mumbai. Residents of Mumbai owning real estate, house, shop, office, building, land, and rented properties are subject to pay Brihanmumbai Mahanagarpalika property tax.

The property tax calculation process slightly varies from other municipal corporations, as MCGM calculates property tax based on the property's market value. Thinking about how this method would affect your MCGM property tax payment? Let us give you a detailed description regarding the whole calculation as well as the payment procedure.

Calculating MCGM Property Tax

1. Old system vs. new system

Previously property tax was calculated using the rate-value system where the payable tax was fixed based on rent collected from a particular property in a year.

However, the system generated low revenue due to the artificially low property charges imposed by the Rent Control Board.

However, the new system adopted by MCGM follows a capital value system where the tax calculation system depends on the stamp duty Ready Reckoner rate.

This rate is issued by the Government, which helps to evaluate the property value based on various parameters.

MCGM revises this rate annually to fix a realistic value. MCGM is the richest municipal corporation in India, whose annual budget is more than the yearly budget of some of the smaller states in the country.

Now that the taxpayers know about the new property taxation system, they must know the MCGM property tax calculation process as well.

2. Calculation process

The MCGM property tax calculation or evaluation depends on several parameters such as property location, property type-residential, commercial or land, classes of amenities provided, construction age, construction type-multi-story, single floor or kutcha house, property occupation status, carpet area, and Floor Space Index (FSI).

Assessing all these factors, civic bodies devise a formula to calculate the tax liability of Mumbaikars.

Here is the formula for calculating MCGM property tax.

Property tax = Tax rate X Capital value

Note:

Property tax is a certain percentage of the capital value.
Capital value depends on the base value.

Therefore,

Capital Value = Rate of the base value/ Market value of the property (based on the Ready Reckoner) x Built-up area x Age factor x Type of building X Category of use X Floor factor.

There are different weights assigned for various factors like construction type, age of the building, and user category.

Read the chart provided below to know about the weights of the respective parameters.

Weights for construction type in units:

Bungalows and RCC construction -1 Unit.
Structures apart from RCC (such as semi-parameters, chawls) - 0.60 units.
Under construction or vacant land - 0.50 units.

Weights for property age in units:

Properties constructed before 1945 - 0.80 units.
Properties constructed between 1945 and 1985 - 0.90 units.
Properties constructed after 1985- 1 unit.

Weights for user category in units:

Hotels and alike establishments - 4 units.
Commercial properties (e.g. shops and offices)-3 units.
Industries and factories - 2 units.
Residential units and charitable institutions – 1 unit.

(The weights mentioned above are subject to change (without prior notice) as per the BMC/MCGM website).

Hence, before calculating the MCGM property tax manually, one must check the website thoroughly. Also, taxpayers can calculate the property tax in Mumbai through the online calculator available in the MCGM online portal.

As stated earlier, the base value or market value of the property depends on the Ready Reckoner which is used to calculate the stamp duty by the revenue department.

Ready Reckoner calculates the base value by using the area rates issued by the Maharashtra Government in the Annual Statement Rates (ASR).

After discussing the MCGM property tax calculation process in detail, we will focus on the payment process of property tax in Mumbai.

MCGM property tax payment procedure

Taxpayers can opt for both online and offline methods for this annual payment. But, first, we will delve into how to pay MCGM property tax online.

MCGM property tax payment online

Follow the step-by-step process to pay MCGM property tax online.

MCGM property tax online payment through BMC/MCGM online portal.

Step 1 - Visit the BMC online portal.
Step 2 - Select ‘pay property tax’ under the ‘online services.’
Step 3 - Provide the property account number. (You will be given three options where you can view outstanding bills or receipts or make payment).
Step 4 - Click on make payment.

MCGM property tax online payment through BMC/MCGM citizen login portal

Step 1 - Visit the official website of MCGM.
Step 2 - Click on the property tax (New) button. (Taxpayers will be redirected to a new page- Citizen Portal property tax).
Step 3 - Enter Property Account No. and Captcha to log in. (In case you do not have the property account no, you can click on the search option and provide the ward number and property address to get the PAN).
Step 4 - After furnishing the required information, taxpayers will be again redirected to a new page where they can see the year-wise distribution of the pending dues.
Step 5 - Verify the details and enter the amount one wishes to pay.
Step 6 – Click on the online payment.

You can complete the MCGM property tax payment online by using the payment gateway and generate a slip.

Please note, the online payment is conducted through National Electronic Funds Transfer (NEFT) from banks, net banking, or via credit cards or debit cards.

MCGM property tax payment offline

To pay property tax in Mumbai offline, taxpayers must pay the due amount at the BMC Help Centres, the Office of the Revenue Officers or at the Citizen Facilitation Centres operating in all wards.

Upon completing the MCGM property tax payment procedure, an MCGM property tax receipt is issued for online and offline use. The receipt acts as ownership proof during any land dispute.

Moreover, this document helps to avail loans against property or to update the property title in the local authority books.

Like every tax payment window is open for a limited time, MCGM property tax payment is no different. So continue reading to know the last date of MCGM property tax payment.

Closing date of MCGM property tax payment

The due date for payment of MCGM property tax in Mumbai is 30th June. Previously the deadline was 31st March.

Penalty charges

Those who fail to pay MCGM property tax within the stipulated date will incur a penalty charge of 2% per month on outstanding payments for each succeeding month.

Proceeding to the next discussion, we would like to provide taxpayers with the information regarding MCGM property tax paid receipt.

MCGM property tax receipt/challan

As stated earlier, taxpayers can download the MCGM property tax receipts after completing the payment.

In case a taxpayer wishes to download the old receipts; he/she can follow the process mentioned below-

Visit the BMC online portal
Select the ‘Online Service’.
Click on the ‘Property tax details’ from the drop-down list.
Click on the ‘Receipt of’ option.

Taxpayers, who have followed the offline MCGM property tax payment, can avail of the challan from their respective payment centre.

Property tax bills on email

As per a recent report (2020) published by Brihanmumbai Municipal Corporation, taxpayers can get the property tax bills through email once they fill the Know Your Customer (KYC) form online. Read on to know the complete process to complete the online KYC process on the BMC/MCGM online portal.

Visit the MCGM online portal.
Enter the property account number.
Put the ‘Captcha’ and click on the ‘login’ button.
Upload the required documents and submit the attested copy.
Provide the email ID and contact details to receive property tax alerts via email and SMS.
Once the process is completed as well as approved, taxpayers can get confirmation by email.

Rebate on MCGM property tax

Taxpayers can avail rebate on MCGM property tax in the following cases.

From 1st January 2019, the state legislation cleared a bill to exempt property tax on residential units measuring up to 500 sq. ft.
Residential units with a carpet area of between 501 sq. ft and 700 sq. ft can avail of a 60% reduction in the tax rates.
Exemption on property tax payment in Mumbai includes property used for public worship or charitable purpose.
Exemption on property tax payment in Mumbai further includes properties dedicated to the Diplomatic or Consular Mission of a foreign state as appointed by the Government.

About the early bird scheme

Brihanmumbai Municipal Corporation has introduced a new scheme named the early bird incentive scheme. The civic body offers a 2% tax concession for those who have the half-yearly (April to September) amount by 30th June. A 4% tax concession is applicable for taxpayers paying the second installment by 30th June.

However, the rebate is only accessible for taxpayers who have no outstanding dues against the property.

Property tax is an indispensable charge that every property owner must pay. Though there is an online and offline method available in India, taxpayers must choose any of them as per their suitability and enjoy the rebate offered by the Government.

With such detailed information on MCGM property tax, we have reached the end of the write-up.

Therefore, pay your property tax and live to behold a beautiful locality with enhanced amenities in Mumbai.

Frequently Asked Questions

✓ Can I get a one-year waiver on property tax?

As per the new report published in 2020 by Brihanmumbai Municipal Corporation, you can avail of a one-year waiver on property tax.

✓ How can one avoid paying property tax in Mumbai?

One can avoid paying property tax by securing a property less than 500 sq. ft.

✓ What is the floor factor of a property tax calculation?

The floor factor of an MCGM property tax depends on the floor on which it is located. Therefore, this factor is inversely proportional to the floor number.