How is property tax calculated in India?

Property tax in India is calculated by municipal corporations using one of three methods: (1) Annual Rental Value (ARV) — tax is based on the notional annual rent the property could fetch; (2) Capital Value System (CVS) — tax is a percentage of the market/Ready Reckoner value of the property, used in Mumbai and Pune; (3) Unit Area System (UAS) — tax is based on the per sq ft rate assigned to the zone, multiplied by built-up area and various factors for age, usage, and occupancy, used in Delhi (MCD) and Bengaluru (BBMP).

What rebates are available on property tax in Delhi (MCD)?

MCD offers several rebates for FY 2025-26: (1) Early payment rebate — 15% discount for lump-sum payment in Q1 (on or before June 30); (2) Senior citizens, women owners, physically challenged, and ex-servicemen — 30% rebate on one self-occupied residential property up to 200 sq m; (3) DDA/CGHS flats — 10% rebate for properties up to 100 sq m; (4) Group housing flats — 20% rebate if paid by June 30; (5) Online payment — 2% additional rebate. Rebates cannot exceed the total tax payable.

Can I claim property tax as an income tax deduction?

Yes. Municipal taxes (property tax) paid to the local authority during the financial year are allowed as a full deduction from the Gross Annual Value under Section 23 of the Income Tax Act when computing 'Income from House Property'. This applies to both let-out and deemed let-out properties. For self-occupied properties, the Net Annual Value is nil, so the deduction doesn't apply separately but prevents additional tax on the notional rent.

What is the due date for property tax payment?

Due dates vary by city. In Delhi (MCD), the standard due date is June 30 (March 31 for annual payment); early payment by June 30 qualifies for a 15% rebate. In Mumbai (BMC), the due date is June 30 with a 2-5% early bird discount. In Bengaluru (BBMP), it is April 30, with an early payment discount. Late payment typically attracts 1-2% interest per month on the outstanding amount.

What properties are exempt from property tax in India?

Properties typically exempt from property tax include: places of worship (temples, mosques, churches, gurudwaras), properties used for charitable or educational purposes, properties of foreign diplomatic missions, government properties used for public purposes, heritage properties notified by the government, properties of gallantry award winners and war widows (in Delhi), and agricultural land in rural areas. Senior citizens, women, and physically challenged individuals get rebates (not full exemption) in most cities.

What is the penalty for not paying property tax on time?

Late payment of property tax attracts interest at 1-2% per month on the outstanding amount, depending on the municipality. In Delhi, the penalty is 1% per month. In Mumbai, a 2% annual penalty applies. Long-term non-payment can result in sealing of the property, attachment of assets, or legal proceedings by the municipal corporation. Several cities run periodic amnesty schemes (like MCD's SUNIYO scheme) where penalties and interest on old dues are waived on payment of principal.

What is the MCD SUNIYO scheme 2025-26?

The Sampattikar Niptaan Yojana (SUNIYO) is MCD's property tax amnesty scheme for FY 2025-26, extended till January 31, 2026. Under this scheme, property owners who pay their current year tax (2025-26) and principal taxes for the previous 5 years (2020-21 to 2024-25) get a 100% waiver on all accumulated interest, penalties, and old arrears up to FY 2020-21. This is an opportunity for property owners with long-pending dues to regularise their records.

How is age factor applied in property tax calculation?

Most municipal corporations apply an age depreciation factor that reduces the taxable value of older properties. Properties 0-5 years old typically carry a factor of 1.0 (no reduction). Properties 6-10 years get a factor around 0.9, 11-20 years around 0.8, 21-30 years around 0.7, and properties over 30 years old may have a factor as low as 0.5-0.6. The exact factors vary by city. This reflects the principle that older properties are worth less and should be taxed less.

Property Tax Calculator India 2025-26 – Delhi, Mumbai, Bengaluru & More

⚠️ Disclaimer: This calculator provides estimates based on publicly available municipal rate schedules for FY 2025-26. Actual tax may vary by ward, zone, and property-specific factors. Always verify with your official municipal portal before payment.

Select City

Delhi MCD — Unit Area System (UAS): Tax = Annual Value × Tax Rate. Annual Value = Unit Area Value × Covered Area × Age Factor × Occupancy Factor × Structure Factor. Delhi is divided into 8 zones (A–H) with different unit area values.

Property Details

Property Type

Built-up / Covered Area (sq. m.)100 sq.m.

Colony Zone (A = Premium, H = Rural)

Ready Reckoner / Market Value (₹)₹50,00,000

BBMP Zone

Annual Base Rate per Sq.m. (₹) Check municipal website₹200

Age of Property (years)10 years

Floor Number

Applicable Rebates

Early payment (Q1 / before due date) 15%

Senior citizen / Women owner / Ex-serviceman / Disabled 30%

DDA / CGHS flat (up to 100 sq.m.) 10%

Group housing flat (paid before June 30) 20%

Online payment 2%

Income Tax Impact

Property tax is deductible from house property income

Your Income Tax Slab

Annual Property Tax (Delhi MCD)

₹0

Before rebates —

Total rebate saved —

Half-yearly: ₹0 | Monthly equivalent: ₹0

🧮 Calculation Breakdown

Annual Value (Base)₹0

Age Factor1.0×

Usage/Occupancy Factor1.0×

Gross Tax (before rebates)₹0

Net Property Tax Payable₹0

🎁 Rebate Summary

💸 Income Tax Deduction Benefit

Property tax paid (deductible)

₹0

Income tax saved (30% slab)

₹0

Deductible under Sec. 23 of IT Act from Gross Annual Value · Applicable for let-out / deemed let-out properties

🏙️ City-wise Property Tax Comparison (Estimated · 100 sq.m. Residential · Self-occupied)

City	Method	Approx. Annual Tax	Key Rebates	Due Date

🏛️ Delhi MCD — FY 2025-26 Key Facts

Method: Unit Area System (UAS)
Zones: A (₹630/sq.m.) to H (₹100/sq.m.)
Early payment rebate: 15% (before June 30)
Senior citizen / Women / Disabled: 30% rebate
DDA/CGHS flats: 10% rebate (up to 100 sq.m.)
Late payment penalty: 1% per month
SUNIYO amnesty scheme: Extended to Jan 31, 2026
Online payment bonus: 2% additional rebate

🌆 Mumbai BMC / 🌿 BBMP — Key Facts

Mumbai method: Capital Value System (CVS)
Tax rate: ~0.316% of capital value (residential)
Early payment (Mumbai): 2–5% discount (before June 30)
Bengaluru method: Unit Area Value (UAV)
Bengaluru: Zone A (₹5/sq.ft./month) to F (₹1.20)
BBMP early payment: 5% discount (before April 30)
BBMP senior citizen: up to 30% rebate
Late payment penalty: 2% per month (Mumbai)

On this page

What is Property Tax?
Calculation Methods
Delhi MCD Rates
Mumbai BMC Rates
Bengaluru BBMP Rates
Rebates & Exemptions
Income Tax Deduction
FAQ

What is Property Tax in India?

Property tax (also called house tax or municipal tax) is an annual levy imposed by local municipal corporations on property owners. The funds are used to maintain and improve civic infrastructure — roads, drainage, parks, street lighting, sanitation, and public health services. Every owner of residential, commercial, or industrial property within a municipal corporation's jurisdiction is liable to pay property tax, including owners of vacant land. In India, property tax is governed by the respective State Municipal Acts, which means rates, methods, and due dates vary significantly from city to city.

Three Methods Used Across India

Method	Used In	Basis	Formula
Unit Area System (UAS)	Delhi (MCD), Bengaluru (BBMP), Hyderabad (GHMC)	Per sq.ft. unit value × zone	Annual Value = UAV × Area × Age Factor × Occupancy Factor
Capital Value System (CVS)	Mumbai (BMC), Pune (PMC)	% of market/Ready Reckoner value	Tax = Ready Reckoner Rate × Area × Building Type × Age Factor × Tax Rate
Annual Rental Value (ARV)	Chennai (GCC), Kolkata (KMC), older systems	Notional annual rent	Tax = Expected Annual Rent × Tax Rate

Delhi MCD Property Tax — FY 2025-26

The Municipal Corporation of Delhi (MCD) uses the Unit Area System. Delhi is divided into 8 zones (A to H), each with a unit area value ranging from ₹630/sq.m. (Zone A — Lutyens' Delhi, Golf Links) to ₹100/sq.m. (Zone H — rural areas). The formula is: Annual Value = Unit Area Value × Covered Area × Age Factor × Occupancy Factor × Structure Factor. Property tax is then charged as a percentage of this annual value (around 11% for residential, 20% for commercial).

Zone	Areas	Unit Area Value (₹/sq.m.)
A	Lutyens Delhi, Golf Links, Sundar Nagar	₹630
B	South Extension, Defence Colony, Greater Kailash	₹500
C	Vasant Vihar, Rohini Phase 1, Pitampura	₹400
D	Dwarka, Janakpuri, Pashchim Vihar	₹320
E	Rohini Phases 2–4, Uttam Nagar	₹270
F	Najafgarh, Outer areas	₹230
G	Peripheral unauthorised colonies	₹200
H	Rural/village areas	₹100

Mumbai BMC Property Tax — FY 2025-26

The Brihanmumbai Municipal Corporation (BMC) uses the Capital Value System. Tax is calculated as approximately 0.316% of the property's capital value per year for residential properties. Capital Value = Ready Reckoner Rate × Carpet Area × Building Type Factor × Age Factor × Usage Factor × Floor Factor. The Ready Reckoner (RR) rate is published annually by the Maharashtra government and varies significantly by location — from ₹5,000/sq.ft. in suburban areas to ₹1,00,000+/sq.ft. in prime South Mumbai localities.

Bengaluru BBMP Property Tax — FY 2025-26

The Bruhat Bengaluru Mahanagara Palike (BBMP) uses a Unit Area Value (UAV) system similar to Delhi. Properties are classified into 6 zones (A–F) with monthly UAVs ranging from ₹5/sq.ft. (Zone A — premium areas) to ₹1.20/sq.ft. (Zone F — village panchayats). The annual tax is: Annual Tax = ((UAV × 12 × Area) – Depreciation) × Tax Rate (0.2 for residential). BBMP also allows a 15-30% rebate for self-occupied residential properties.

Rebates & Exemptions — FY 2025-26

Rebate Type	Delhi MCD	Mumbai BMC	Bengaluru BBMP
Early payment	15% (by June 30)	2–5% (by June 30)	5% (by April 30)
Senior citizen / Women	30% (one property, up to 200 sq.m.)	Up to 50% (varies by ward)	30% (self-occupied)
Ex-servicemen	30%	Available	Available
Physically challenged	30%	Available	Available
Online payment	2%	—	—
Late penalty	1%/month	2%/year	2%/month

Property Tax as Income Tax Deduction

Municipal taxes (property tax) paid to local authorities during the financial year are allowed as a full deduction from the Gross Annual Value when computing "Income from House Property" under Section 23 of the Income Tax Act. This applies to let-out and deemed let-out properties. At a 30% tax slab, every ₹10,000 of property tax paid saves ₹3,000 in income tax. For self-occupied properties, the Net Annual Value is nil under law, so property tax paid does not provide an additional income tax benefit but helps maintain property records for potential future deductions.

Frequently Asked Questions

Property tax is calculated using one of three methods: Annual Rental Value (ARV), Capital Value System (CVS, used in Mumbai/Pune), or Unit Area System (UAS, used in Delhi/Bengaluru). The general formula across all methods is: Tax = Base Value × Built-up Area × Age Factor × Usage Factor × Location Factor × Tax Rate. Each municipality publishes its own rate schedule annually.

MCD offers: 15% early payment rebate (lump sum before June 30), 30% for senior citizens/women/disabled/ex-servicemen on one self-occupied property up to 200 sq.m., 10% for DDA/CGHS flats up to 100 sq.m., 20% for group housing flats (before June 30), and 2% additional for online payment. Under the SUNIYO amnesty scheme (extended to Jan 31, 2026), paying current-year tax clears all old dues, interest, and penalties.

Yes. Municipal taxes (property tax) paid to local authorities are fully deductible from the Gross Annual Value under Section 23 of the Income Tax Act when computing Income from House Property. This deduction is available for let-out and deemed let-out properties. At the 30% tax slab, every ₹1 lakh of property tax saves ₹30,000 in income tax.

Due dates vary: Delhi (MCD) — June 30 for early payment rebate, March 31 for the financial year. Mumbai (BMC) — June 30 with early bird discount. Bengaluru (BBMP) — April 30 with 5% early payment discount. Late payment attracts interest of 1–2% per month depending on the city. Several cities offer amnesty schemes periodically to waive penalties on old dues.

Typically exempt: places of worship, charitable/educational institutions, properties of foreign diplomatic missions, government properties for public use, heritage properties notified by the government, properties of gallantry award winners and war widows (Delhi), and agricultural land in rural areas. Senior citizens, women, and disabled individuals get rebates (typically 30%) rather than full exemption in most cities.

Late payment penalties: Delhi (MCD) — 1% per month. Mumbai (BMC) — 2% per year. Bengaluru (BBMP) — 2% per month. Long-term non-payment can result in sealing, asset attachment, or legal proceedings. Several amnesty schemes are periodically announced to allow owners to clear dues without penalties.

The Sampattikar Niptaan Yojana (SUNIYO) is MCD's property tax amnesty scheme for FY 2025-26, extended to January 31, 2026. Property owners who pay the current year's tax (2025-26) and principal for the last 5 years (2020-21 to 2024-25) get a 100% waiver on accumulated interest, penalties, and all arrears up to FY 2020-21. It's an opportunity to regularise old dues with a clean slate.

Most municipal corporations apply a depreciation factor that reduces the taxable value of older properties. Properties 0–5 years old typically use a factor of 1.0, 6–10 years around 0.9, 11–20 years around 0.8, 21–30 years around 0.7, and properties over 30 years may use 0.5–0.6. The exact factors vary by city, reflecting that older properties have lower market value and should attract lower tax.