Method of Self-assessment of Property Tax
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i.e., the capital value of the building may be calculated by subtracting the depreciation out of the cost of construction of the building and by adding the capital value of land, e.g. the plinth area of the building is 800 sq. ft., cost of construction is Rs 360 per sq. ft., the age of the building is 10, the value of the land per sq. ft is Rs 60. What is the capital value of the building? CC = 360, PLA = 800, LV = 60, DQA = 0.09562 CVB = 360 800 – 360 800 0.09562 + 60 800 CVB = 288000 – 27538 + 48000 = 308462 Capital value of the buildings for tax at the rate of 0.2% = (308462 2) / 1000 = 616.92 Tax at the rate of 0.3% = (308462 3) / 1000 = 925.386 Tax at the rate of 0.3% is Rs 925 Tax at the rate of 0.4% is Rs 1234 Tax at the rate of 0.5% is Rs 1542 Tax at the rate of 0.6% is Rs 1850 The Municipality shall issue the following guidelines essential for tax assessment. 1. Estimated market value of the land. 2. Estimated cost of construction of the building for difference types of building. 3. Depreciation quotient for relevant age of the building. 4. Rate of property tax based on nature of use. The taxpayer may calculate the property tax himself by utilizing the above information. If a person calculates the tax using the above criteria there will be no discrimination. The criteria followed here is visible and measurable. Hence there is no doubt that the system of selfassessment of property tax based on capital value is scientific.
The information to be furnished by the Municipality
The Municipality should determine the rate of tax and publish the same. In addition the following information