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5 Things You Need to Know About Paying Building Tax Online

Blox Social
Posted on
Apr 27, 2023

Building tax is the same as property tax, except it is imposed only on constructed structures rather than land or any other type of property. Similar to property tax, building tax is levied by municipal bodies based on the annual evaluation of the structure. Most municipal corporations today have adopted digital technology to enhance the speed and efficiency of their services. Consequently, it is now possible for people to pay their building tax online and save considerable time. Read on to learn more about the benefits, rules, and other aspects of paying building tax online.

Benefits Of Paying Tax Online

Paying building tax online proves beneficial for taxpayers in the following ways.

  • Paying the tax online ensures instant transfer of funds from the bank account and hence eliminates the waiting period for payment confirmation. 
  • Online payment enables taxpayers to make payments from anywhere and at any time using Internet banking and UPI services. 
  • The transaction ID of the payment is automatically stored in the bank account, which eliminates the need for taxpayers to store the same physically. 
  • Online payment ensures the highest level of transparency between the taxpayer and the government body collecting the tax. 
  • The payment can be easily tracked on the website of the tax collecting body, which minimises the risk of financial loss.

Rules Of Paying The Building Tax Online

While paying the building tax online, taxpayers need to follow some rules, which are mentioned below. 

  • To pay the building tax online, the taxpayers need to fill in their Property Tax Number, Revenue Survey Number, or Khatha Number, on the state or municipal website. 
  • For any advance tax payments, any balance amount remaining after correcting the dues from the previous years will be reimbursed to the taxpayers through DD or check 
  • In case of any outstanding or unpaid balance from previous years, the amount will be included in the building tax for the current fiscal year. 
  • Taxpayers can pay the building tax for the current fiscal year in two instalments, and in such cases, they may use the same form for the first and second instalments.
  • Paying the building tax in a single instalment can help taxpayers get a discount of 5% on the total tax amount. 
  • Any arrears for prior years cannot be paid until the challans for each of these years have been generated. 
  • An interest of 2% per month on the tax amount is automatically computed for the defaulted period.

While most of the rules mentioned above are generic, they might vary slightly from one state to another and one municipal corporation to another. 

Important Things to Know About Paying Building Tax Online

In addition to being aware of the rules of paying building tax online, taxpayers also need to learn the following important things about the process.  

Awareness of Key Details About Their Building

When paying building tax online, taxpayers should be aware of the key details of the building. These include the classification of the building, its annual evaluation value, build-up area, number of floors, structure dimensions, electricity bills, and exemptions, if any. Many of these details need to be provided while filling out the forms for online tax payment. 

Penalties Are Charged For Not Paying Building Taxes

Almost all municipal corporations levy fines and penalties on building owners for not paying the building tax on time. The actual penalty amount varies between different states, cities, and locations, but it generally ranges between 5% and 20% of the tax amount. Regular defaulters may also end up losing ownership of the building to foreclosure. 

Credit Cards Can Be Used To Pay The Tax

Many municipal corporations allow taxpayers to pay the tax using their credit cards. In most such cases, the payment is made through third parties that help facilitate the process. However, using credit cards for paying building tax is not recommended as the service providers generally charge a fee of 2-3%, which can amount to a significant sum for high-value buildings. The best way to pay the building tax online is through Internet banking or UPI services.

‘Building Tax’ Can Offer a Tax Break 

Paying building tax can make taxpayers eligible to seek tax deductions, tax credits, and tax rebates. Taxpayers can also deduct the tax amount while filing income tax returns. Such tax breaks can help reduce the total tax amount for the taxpayers, besides helping them qualify for a refund. 

Learning About Any Applicable Exemptions

Most building owners are unaware of the fact that some buildings are exempt from tax based on certain conditions. The conditions for tax exemption may vary from state to state, and hence the taxpayers should check the same with their local municipality. 

Final Words

Paying building tax is a moral obligation of building owners and can prove beneficial for them in the long run. Paying the tax online helps in making the process simpler and more convenient for taxpayers while also ensuring that the payment is made on time. 

Finance & Legal