Does Paying Property Tax Give Ownership in India | NoBroker Forum (2024)

Hey Pal,

A few years back I was in a legal dilemma. I am a single child and I am the legal owner of my dad’s property in India. However, I stayed for a very long time in the USA, and during my absence, one of my cousins was helping us by paying the property tax on my behalf. Though I repaid him every single penny. Nevertheless, when I returned to my cousin, Ankit started threatening me about confiscating my property because he paid the property taxes. I visited a property lawyer immediately and enquired, ”Does paying property tax give ownership in India?”

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One of the issues that come up the most frequently is a property dispute. There are arguments over inheritance, ownership, rent, etc. The most frequent disagreements are the rights that each party has at the time of tenancy of the property and the rights that are granted to each party by the owner.

The property lawyer guided me and clarified my doubt. I am going to explain whatever he told me regarding my query.

Does paying property tax give ownership in India?

Typically, those who can prove ownership of a piece of property must pay property tax on it. Property tax is a levy imposed by the local government that must be paid by the owner of the property. The issue of whether paying property taxes can transfer ownership of a property to a person does, however, come into play.

It is generally accepted that a taxpayer will never acquire ownership rights to a property just by paying property taxes. A person cannot claim ownership of property just by paying property taxes on a piece of real estate in which another person holds the title.

Taxes on someone else's property can always be paid. The idea that paying taxes on someone else's property makes one the owner of it, however, is a metaphor. To get easy ownership, paying someone else's property taxes is therefore completely useless. Only the legitimate owner of the property is eligible to deduct these costs, thus they cannot be claimed.

Is property tax proof of ownership?

Property tax records can be used as evidence of ownership. Also, if the name on the property tax is not changed, the prior owners will be legally obligated to pay the taxes. Along with changing the property tax, the new owner needs to transfer several other receipts into his or her name to ensure a smooth transfer of ownership of the building.

After getting the idea, I gathered courage and contested my cousin, Ankit. Finally, the court dismissed the case and assured me that the property belongs to me.

I would like to conclude here as I believe this suffices your query about ”Does paying property tax give ownership in India?”

Read More:

How to get my property tax receipt online?How to find a revised property tax assessment number?How to get the property tax number in the property document?

Does Paying Property Tax Give Ownership in India | NoBroker Forum (2024)

FAQs

Does Paying Property Tax Give Ownership in India | NoBroker Forum? ›

It is generally accepted that a taxpayer will never acquire ownership rights to a property just by paying property taxes. A person cannot claim ownership of property just by paying property taxes on a piece of real estate in which another person holds the title. Taxes on someone else's property can always be paid.

Is property tax proof of ownership in India? ›

Property tax can serve as proof of ownership of the property. Also, the previous owners will be liable to pay the taxes legally if the name in the property tax is not changed.

Who should pay property tax, tenant or owner in India? ›

Only the owner of the property is liable for paying the property tax. Hence, if you are a tenant, you need not be concerned about it. In case of a property dispute, the property tax receipt plays a crucial role, to prove ownership of property.

What happens if you don't pay property tax in India? ›

If you fail to pay property tax on time, you are subject to interest charges. These penalties can be much higher over time. Municipal authorities can take various actions including sending notices, attaching a lien to the property, or even initiating legal proceedings to recover the unpaid taxes.

How does property tax work in India? ›

The formula used for calculating property tax is given below: Property tax = base value × built-up area × Age factor × type of building × category of use × floor factor. Property tax in India depends on the location of a property in question, with taxes varying from state to state.

How do you prove ownership of a property in India? ›

In India, land ownership is primarily established through a registered sale deed (a record of the property transaction between the buyer and seller). Other documents used to establish ownership include the record of rights (document with details of the property), property tax receipts, and survey documents.

Who is the legal owner of property in India? ›

The person having possession of the deed is also the legal owner of the property.

How to save property tax in India? ›

Investing in tax-saving instruments in India offers avenues to save on property gain tax. Explore options like equity-linked savings schemes (ELSS), tax-saving fixed deposits, and certain bonds to offset capital gains. By utilising provisions like Section 80C, investors can claim deductions on investments up to Rs.

Do flat owners have to pay property tax in India? ›

Similarly, the immovable property of a person is also subject to tax and every piece of real estate is taxable. Property tax is an annual amount paid by a property owner to the municipal corporation of a particular area or the local government.

Who is liable to pay property tax in India? ›

In India, owners of real estate properties are subject to pay a property tax. It is an annual charge levied by the Government of India on property owners. This tax is collected by the local government or the Municipal Corporation, whoever is authorised to do so in a given state.

What are the issues with property tax in India? ›

Highlights
  • • ...
  • Undervaluation of properties and scarcity of data on rental value, together with incomplete and outdated rolls reduce the revenue base.
  • Administration factors such as complex tax rates and classifications, numerous exemptions and weak fiscal efforts add to this.

How can I avoid real estate tax in India? ›

Construct one house within 3 years after the date of sale of land. Do not sell the house within 3 years of purchase or construction. On the transfer date, you should not own more than 1 residential house, excluding the new one. The exemption under this Section has been limited up to Rs. 10 crores.

Is house tax mandatory in India? ›

Municipal bodies and state governments impose this mandatory levy to finance community facilities including roads, sanitation, and water supply. The tax obligation varies per the property's characteristics and the owner's profile. Households remit payments through official municipality websites or dedicated portals.

Does paying property tax give ownership in India? ›

Tax bills cannot confer ownership of a property on a person who paid the tax. Tax bills must be generated in the name of the owner of the property as per revenue records. Check all the property related documents for clean title and then purchase.

Is it worth buying a house to save tax in India? ›

The Government of India exempts you from taxation for a home loan up to 2 lakh rupees. Section 24 of the Income Tax Act of 1961 states this exemption in detail and gives the benefits to the owner of the property as an exemption.

Is property tax deductible in India? ›

These expenses are available for income tax deductions under section 80C of the Income Tax* Act. The maximum deduction allowed under this section is ₹1.5 Lakh. As a house owner, you can also claim property tax deductions for the expenses incurred by you during the transfer of your newly constructed house.

What refers to proof of property ownership? ›

Deed or official record: Original deed, warranty deed or deed of trust to the property. A utility bill dated between April 2022 and present, must also be included. Mortgage documentation: Mortgage statement, mortgage promissory note or the closing disclosure form.

How do I find out who owns a property in India? ›

2) How to check property ownership online in india? Every state has a separate website for property detail. To check for the land ownership, one needs to visit the official website of the same. Land records of the concerned states will be available on their respective official website.

How can I prove possession of land in India? ›

To obtain proof of possession or a possession certificate, you must apply through the revenue department of your local or state government in India. The application process usually involves supplying mandatory documents such as previous ownership deeds, identity proofs, address proofs and more.

Is an electricity bill proof of ownership in India? ›

Electricity bill is not document of title Based on the provided data, it can be concluded that an electricity bill is not considered a document of title.

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