Mit (Software engineer) 29 November 2009

Property tax revision based on rent

HI,

My friend has a flat in pune and currently paying 5,000 as property tax. suppose the fair rateable value may be X and considered on the average rent being 10,000/-.

If the rent that he will actually receive is say 25,000/-.

1) Will the rateable value increase ?

2) At the end fo the leave and license agreement, if my friend stops receiving any rent and re-occupies the same flat, does the rateable value come down ? will it be the original or some other calculation ?

don't know whether this is the right forum to ask this question. but if anyone can help, it will be highly appreciated.

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2 Replies

A V Vishal (Advocate) 29 November 2009

Calculation of ARV: -

Floor Area in sq.ft. Rate Total

Basement

Ground floor

Ist Floor

IInd Floor

IIIrd Floor

IVth Floor

Vth Floor

(b) Vacant Area

Area in sq.ft. Rate Total

6.
Total 5(a)+(b) ___________X12 = _______________
7. Deduct 10% of col. 6 as repair _______________ = _________________

8. Total ARV _________________

9. Rounded of near multiple of 100(net taxable ARV) _________________

10. Tax payable @ ____% __________________

11. Fixed Rate of Tax@ Rs.__________p.m. __________________

12. Rebate at the Rate of _________________

13. Tax Paid _________________

(a) Built up Area: -

Mit (Software engineer) 30 November 2009

Thank you Mr. Vishal. You have given the formula but actually my question was about whether because of rent realized that is HIGHER than the fair rent value,

1) Will the ARV be revised upwards and hence the incidence of tax also increase while the premises are let out

AND

2) Suppose the answer to the above is yes, then whether once the owner re-occupies the same flat say after the elave and license period is over, if the tax incidence was increased before because of higher rent, will the same tax amount be charged or a lower value ? Suppose becuase of higher rent income, the property tax that began to be levied became 12,000 instead of 5000.

The above during leave and license. Now if the flat is again self-occupied. Will it come back to 5000 or prevailing value or it will still remain 12,000/- ? meaning, the fact that once it was increased to 12,000 - will that have any bearing on subsequent levy upon the house again becoming self-occupied.

Thanks!