Kashmir’s New Quiz: How to Calculate TAV In Property Tax Regime?

SRINAGAR: In anticipation of imposing property tax being on Jammu and Kashmir from fiscal 2023-24, the administration has literally posed a quiz – how to calculate property tax.

This is the main Srinagar city called the down-town where congested housing is the norm. KL Image: Bilal Bahadur

The order issued said that five per cent of the taxable annual value (TAV) will be charged as property tax in residential structs and six per cent in the case of residential structures. But how to calculate the TAV? For this, the notification has offered a formula, which is being discussed almost everywhere, especially in Srinagar.

The formula is:

Taxable Annual Value (TAV) = MTF x LVF x ARF x FF x UTF x CTF x AGF x SF x OSF

But calculating the individual parameters in the complex multiplication is also challenging. It looks more like an inorganic chemistry chain reaction rather than a mathematical calculation.

The order has given details about what these terms are and how much of value should they be carrying. Here it is:

MTF is Municipality Type Factor. Its value shall be entered in the formula as follows:

1. Municipal Council – 0.75
2. Municipal Committee – 0.5

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 Guideline Rules, 2011 as on 1st April of the base year of that block of three years. e.g. for the first block from 1st April 2023 to 31st March 2026, if the per kanal value of land as on 1st April 2023 as per the aforementioned value guidelines is Rs 60 lakh, it be entered as 6 in the above calculation and shall continue to be entered as 6 during the three financial years of the block.

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 the 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 appurtenant 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, the floor factor shall be entered in the formula as follows.

1. Residential buildings including flats:
2. Other buildings: 1
3. Ground floor 1
4. First floor 0.8
5. Second floor 0.7
6. Third floor and above 0.5
7. Vacant land 0.1
8. Basements for all types of buildings: 0.5

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. The value to be entered in the formula for different usage types shall be as follows:

1. Residential apartment/ flat 2
2. Residential House 2.5
3. Industrial (Manufacturing) 5
4. Institutional/Public/Semi-Public 7
5. Commercial, except 3-star and above Hotels: 12
6. towers & hoardings

1. 3-star and above hotels, 15

towers & hoardings.

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:

1. RCC construction 1
2. Pucca (without RCC) construction 0.9
3. Prefabricated structure 0.8
4. Kuccha/Bamboo/Wood/Tin Structure 0.6

AGF is Age Factor. The value for this factor shall be entered in the formula as follows:

a.	0-20 years old	1.00
b.	20-30 years old	0.90
C.	30-40 years old	0.80
d.	40-50 years old	0.70
e.	50-60 years old	0.60
f.	More than 60 years old	0.50

 

SF is Slab Factor. The value of slab factor shall be entered in the formula as follows based on the total built-up area calculated as indicated at 3 above.

1. Residential houses/ apartments

i. Upto 1000 sft – 0

ii. Above 1000 sft upto 1500 sft. – 0.75

iii.        Above 1500 sft upto 2000 sft – 1.0

1. Above 2000 sft upto 2500 sft – 1.15
2. Above 2500 sft upto 5000 sft – 1.30
3. Above 5000 – 1.5
4. Other usage types
5. Upto 100 sft – 0.50
6. Above 100 sft upto 250 sft – 0.75

iii.        Above 250 sft upto 500 sft     1.00

1. Above 500 sft upto 1000 sft 1.15
2. Above 1000 sft upto2500 sft 1.30
3. Above 2500 sft upto 5000 sft 1.5

VII.       Above 5000 sft            2.0

OSF is Occupancy Status. The value of this factor for built-up properties shall be entered in the formula as follows:

1. Self-occupied for more than 6 months 0.75
2. Others 1.0

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