New Delhi: New Delhi Municipal Council (NDMC) has prepared a draft introducing the unit area method (UAM) to calculate property tax, proposing a 30% rebate for self-occupied residential properties for men aged 65 and above, and all women and persons with disabilities (PwD).The rebate, applicable only to plots with a built-up area of up to 100 sqm, will be available for not more than one residential building within the jurisdiction of New Delhi, NDMC stated.The council has invited public feedback on the proposed changes and sought suggestions by Oct 23. The move is in accordance with the Jan Vishwas Act (Amendment of Provisions), 2026, and aims to simplify the property tax system, said officials.According to the draft, property tax will be calculated based on several factors, including the property’s use (residential, commercial, office, hotel, hospital, nursing home, recreational or industrial), age of the structure (before or after 1960), structural characteristics (kuccha/puccha), occupancy (self-occupied or rented), location based on circle rate categories (A to H) and the area’s infrastructure.The width of the road or street on which the property is located will also be considered, with separate categories for roads – those measuring 24 metres and more, between 13.5 metres and 24 metres, and less than 13.5 metres.As per other proposals in the draft, the standard tax rate would apply if 25% of a plot’s area has been built upon. Where construction covers less than this threshold, an additional tax, termed ‘vacant land tax’, may be levied at a rate determined by NDMC.Property tax may be paid in a lump sum or in four equal quarterly instalments. A rebate of up to 15% is proposed for taxpayers who pay the entire amount by June 30 of the financial year. For delayed payments, a simple interest charge of 1.5% per month or part thereof has been proposed.The draft also proposes a processing fee of Rs 100 per assessee for each assessment period for providing information on the apportionment of property tax among multiple occupants of a building or vacant land, including for previous assessment periods.NDMC currently calculates property tax using the rateable value method, which is based on the assessed value of a property. In contrast, Municipal Corporation of Delhi (MCD) follows UAM, which calculates tax using a formula based on factors like property size, use and age, among others, thereby reducing the taxable amount.Residents in NDMC area have been demanding the introduction of UAM since 2016. Traders in prominent markets and business centres, including Khan Market and Connaught Place, still pay the tax as per the rateable value method.“The draft will be placed before the council for approval after suggestions received from the public are examined and incorporated, where required. Once approved, a formal notification will be issued and submitted to Parliament for ratification,” stated the agency.After parliamentary approval, a municipal valuation committee (MVC) will be constituted to recommend tax rates, slabs, base values and categorisation of colonies within NDMC area. The base unit area values for each category will remain in force for three years and will be multiplied by five factors: use, age, structure, occupancy, and infrastructure and location. The MVC’s recommendations will subsequently be placed before the council for approval and implementation.“The reform will reduce disputes, improve transparency and bring greater predictability to tax liabilities. It will also eliminate what officials describe as pre-Independence-era ‘property tax inspector raj’,” said an official.
