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The Jammu Kashmir administration has announced the rules for levy, assessment and collection of property tax from the residents of Jammu Kashmir.
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In a copy of the order accessed by The Kashmiriyat,the administration has said that the Taxable Annual Value (TAV) of a property under the Act and the property tax due thereon for a financial year shall be calculated in accordance with the formula given in Schedule-l to these rules (which are mentioned below).
Against media reports, both residential and non-residential properties have been included in the collection of the property tax. The Ministry of Home Affairs (MHA) authorised the JK administration to impose property taxes through Municipal Corporations, Municipal Councils, and Municipal Committees in October 2020.
The Jammu and Kashmir Municipal Act of 2000 and the Jammu and Kashmir Municipal Corporation Act of 2000 were modified by the MHA with the enactment of the Jammu and Kashmir Reorganization (Adaptation of State Legislation) Order of 2020.
The property tax calculated in respect of a building calculated in accordance with sub-Rule (1) above shall 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 administration said.
The first block shall commence from 1 April 2023, and shall continue to remain in force till 31st March 2026. The blocks shall be similarly calculated thereafter, the JK administration notified.
New buildings coming up after the commencement of the block shall have their property tax liability calculated with reference to the 1st 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.
Where a building is liable to property tax for only a part of the year, the tax due shall be proportional to the number of completed months and parts of month not completed shall be ignored.
Procedure for assessment and collection of property tax. The procedure prescribed in Chapter VI of the Act, except insofar as it relates to the calculation of the tax due on a property, shall regulate the assessment and collection of property tax.
Form of return under sub-section 5 of Section 73 of the Act. A person liable to property tax shall 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 30th May of the financial year to which the return pertains. It shall be accompanied by a proof of payment in Form-2. Acknowledgment of filing of return shall be in Form-3. A copy of the acknowledgment along with the proof of payment of the second installment of tax shall be furnished by 30th November in cases where the payment is made in two installments.
Penalty for delay in filing of return. Failure to file return in due time, unless prevented by sufficient cause, shall, 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% of the tax due, whichever is higher, for every month of default. The maximum penalty shall not exceed Rs 1000/-.
Notice for inspection. The notice in terms of sub-section 8 of Section 73 of the Act shall be in Form-4 and the date of inspection shall, unless there are reasons to recorded in writing for giving a shorter notice, not be less than 14 days from the date of notice.
Notice for assessment on best judgment basis. The notice in terms of sub-section 9 of Section 73 of the Act shall be in Form-5clearly mentioning the liability of property tax proposed to be determined and the basis thereof, and the date of hearing shall, unless there are reasons to recorded in writing for giving a shorter notice, not be less than 21 days from the date of notice.
Notice for re-assessment. The notice in terms of sub-section 10 of Section 73 of the Act shall be in Form-5A clearly mentioning the additional amount of property tax proposed to be levied and the basis thereof, and the date of hearing shall, unless there are reasons to recorded in writing for giving a shorter notice, not be less than 21 days from the date of notice.
Notice of demand. The notice of demand in pursuance of assessment or reassessment under sub-section 11 or sub-section 13 of Section 73 of the Act, as the case may be, shall be in Form-6.
Appeal. Till such time the Jammu and Kashmir Property Tax Board in terms of the Jammu and Kashmir Property Tax Board Act, 2013 is constituted, the reference thereto in Section 90, 91and 92of the Act shall be deemed as a reference to the Director Urban Local Body of the concerned division.
Exemption from payment of property tax: Vacant lands, not appurtenant to a structure/building shall be exempt from property tax if there’s a Master Plan in force in the area, under which any construction/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 shall be exempt from payment of property tax.
All properties owned by Government of India / UT Government shall be exempted from payment of Property Tax. However, service charge at the rate 3% of the taxable annual value shall be payable to the Municipality in respect of such properties, the JK admin has said in its notification.
The Jammu Kashmir administration has also notified the formula for the levying of Property Tax in Jammu Kashmir region.
It said, Property Tax on Residential Property = 5% of Taxable Annual Value (TAV) Property Tax on Non-Residential Property = 6% of Taxable Annual Value (TAV)
Taxable Annual Value (TAV) = MTF x LVF x ARF x FF x UTF x CTF x AGF x SF x OSF
Where: 1. MTF is Municipality Type Factor. Its value shall be entered in the formula as follows:
a. Municipal Council 0.75, b. Municipal Committee 0.5
2. LVF is Land Value Factor. It 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 1st April of the base year of that block of three years. e.g. for the first block from 1st April, 2023 to 31 March, 2026, if the per kanal value of land as on 1st April, 2023 as per the aforementioned value guidelines is Rs 60 lakh, it be entered as 6 in the above calculation and shall continue to be entered as 6 during the three financial years of the block.
3. ARF is the Area Factor. It 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 shall not be counted in built-up area. In the case of Property tax on vacant land not appurtenant to a building, the area of the vacant land in square feet shall be entered. In the case of Property tax on vacant land appurtenant to a building, the area to be entered in the formula shall be the area, in square feet, in excess of two times the built-up area of the ground floor.
4. FF is floor factor. For calculating the liability of different floors and vacant land abutting the building, the floor factor shall be entered in the formula as follows:
a. Residential buildings including flats, b. Other buildings: 1. Ground floor 2. First floor 0.8, 3. Second floor 0.5, 4. Third floor and above 0.1, 5. Vacant land 5 100OC 0.7 8751.
C. Basements for all types of buildings: 0.5
5. UTF is Usage Type factor. For vacant land appurtenant to a building, it shall be the same as that of the building itself. 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 shall be separately calculated, proportionately, for each area under a particular use. The value to be entered in the formula for different usage types shall be as follows:
a. Residential apartment/ flat 2.5, b. Residential house, C. Industrial (Manufacturing) 22572, d. Institutional/Public/ Semi Public e. Commercial, except 3 star and above Hotels: 12, towers & hoardings 15.
6. CTF is the Construction Type Factor. Its value shall be entered in the formula as follows, based on the predominant and substantive nature of the construction:
a. RCC construction, 1, b. Pucca (without RCC) construction 0.9, C. Prefabricated structure 0.8, 0.6, d. Kuccha/Bamboo/Wood/Tin Structure
7. AGF is Age Factor. The value for this factor shall be entered in the formula as follows:
a. 0-20 years old 1.00, 0.90, b. 20-30 years old, C. 30-40 years old 0.80, d. 40-50 years old 0.70, e. 50-60 years old 0.60, f. More than 60 years old 0.50
8. SF is Slab Factor. The value of slab factor shall be entered in the formula as follows based on the total built-up area calculated as indicated at 3 above.
SF is Slab Factor. The value of slab factor shall be entered in the formula as follows based on the total built-up area calculated as indicated at 3 above.
a. Residential houses/ apartments L Upto 1000 sft 0, Above 1000 sft upto 1500 sft 0.75, 1.0, Above 1500 sft upto 2000 sft 1.15, Above 2000 sft upto 2500 sft 1.30, Above 2500 sft upto 5000 sft 1:40.