Understanding the Implications of Jammu and Kashmir’s Newly Imposed Property Tax: 2023
The new property tax policy in Jammu and Kashmir, which was imposed starting April 1, 2023, requires all residents living in municipal areas to pay a property tax on their residential and non-residential properties. The tax rates are set at five percent of the Taxable Annual Value (TAV) for residential properties and six percent for commercial properties.
The Jammu and Kashmir administration expects to generate Rs 150 crore in revenue from the property tax for the fiscal year 2023-24. The purpose of implementing this tax is to make municipal corporations and other bodies financially self-sufficient and to improve municipal services for the benefit of the people. The revenue generated from property taxes will be used to enhance infrastructure, construct new parks and playgrounds, and maintain existing facilities.
To alleviate the burden on taxpayers, the property tax can be paid in two equal installments. The rates have been set in a progressive manner to minimize the impact on small businesses and households. The calculation of property tax takes into account factors such as the stamp duty tax of the area, property valuation based on different areas, the age and use type of the property, and the construction type.
Certain properties are exempt from the property tax in Jammu and Kashmir. These include vacant lands without structures or buildings, properties of the Municipality, and all places of worship, cremation, and burial grounds. Additionally, residential properties with an area of up to 1,000 square feet are exempt from property tax. Residential properties with a built-up area of up to 1,500 square feet receive concessions and relief for the LIG (Low-Income Group) and MIG (Middle-Income Group) category houses.
It is worth noting that Jammu and Kashmir is one of the last states or union territories in India to implement a property tax.
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