Northlines Correspondent
Jammu Tawi, Feb 21: Jammu Kashmir Administration today gave yet another shock to the people of Jammu Kashmir as it has issued an order imposing Property Tax on all properties – residential or non-residential at rates of 5 % and 6 % respectively annually of Taxable Annual Value (TAV) effective from Ist April 2023.
A notification issued today (21.02.2023) as SO 87 exercising powers conferred by Section 71A of Jammu and Kashmir Municipal Act 2000 (read with sub-section 1 of section 65 and sub-section 1 of Section 73), the government notified new rules called Jammu and Kashmir Property Tax (Other Municipalities) Rules 2023 which shall come in force from April 01, 2023.
The J&K administration was given permission by the Ministry of Home Affairs (MHA) in October 2020 to impose property taxes in the Union Territory through Municipal Corporations, Municipal Councils, and Municipal Committees.
With the passage of the Jammu and Kashmir Reorganization (Adaptation of State Laws) Order, 2020, the MHA amended the Jammu and Kashmir Municipal Act, 2000, and the Jammu and Kashmir Municipal Corporation Act, 2000.
The calculation formula for the levy of Property Tax on Residential and Non-residential properties in Jammu Kashmir has been given in the Schedule –I attached to the notification.
The Formula is based on the calculation of various factors called MTF (Municipality Type Factor), LVF (Land Value Factor), FF ( Floor Factor), UTF ( Usage Type Factor), CTF (Construction Type Factor), AGF (Age Factor), SF ( Slab Factor) and Occupancy Status factors calculated together and then arrived at with the quotient given against each factor.
The annual Property Tax return is envisaged to be filed failing which a penalty of one per cent of tax due or Rs. 100 for every month of default with a maximum of up to Rs. 1000/.
Rules for levying, assessment and collection of property tax in the limits of municipal councils and municipal committees of the UT, the Taxable Annual Value (TAV) of a property and the property tax due thereon for a financial year shall be calculated in accordance to the given formula. The Rules state that the property tax on residential property would be 5% of Taxable Annual Value (TAV) while that of non-residential property to be 6 % of Taxable Annual Value (TAV).
The property tax calculated in respect of a building shall hold for a block of three years unless any change.
According to the Rules, vacant lands, not appurtenant to a structure/building shall be exempt from property tax if there is 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
All the properties of the municipality and all places of worship, including temples, masjids, Gurdwaras, Churches, Ziarats, etc. and cremation and burial grounds shall be exempt from payment of property tax,” the Rules state. The land patches under crop cultivation is also exempted.
The Rules state that shall be exempted from payment of property tax.
There shall be a service charge on all properties owned by the Government of India/UT government at the rate 3% of the taxable annual value shall be payable to the Municipality in respect of such properties.
How to calculate the Property Tax:
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
(Multiplying the quotient given against each factor and then divided by the rate of property tax as applicable to the classification of the property)
Where MTF is Municipality Type Factor.
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.
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 adjacent 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.
FF is floor factor. For calculating the liability of different floors and vacant land abutting the building.
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.
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.
