Odisha Property Tax

Property tax is a direct tax imposed on real property and serves as a significant income source for local government. This taxation system requires property owners, lessees, or occupiers to pay tax annually. The revenue collected supports public services such as libraries, road maintenance, and sanitation. Timely payment of property tax is essential to avail tax benefits and avoid legal issues. In Odisha, this tax is known as holding tax. This article covers Odisha's property tax features, also known as holding tax, and details the payment procedure.

The Odisha Municipal Act, 1950

Under the Odisha Municipal Act, 1950, the State Government of Odisha collects holding tax. Plans are underway to replace this with a property tax for all municipal bodies and urban local bodies in the state. For the change, amendments to the Odisha Municipal Act, 1950 and Odisha Municipal Corporation Act, 2003 are necessary. Currently, holding tax collection continues as per the existing act.

Properties Liable for Property Tax

Property tax applies to various types of buildings, categorized by a valuation committee under the Municipal Corporation Act based on usage and structural characteristics. The categories include:

Residential
Commercial
Recreation and Sports
Industrial
Hospitals and Nursing Homes
Educational
Public Purposes
Hotels and Restaurants

Responsibility

According to the Act, the following individuals are responsible for paying the Holding Tax:

Owner or joint owners
The lessor if the property is leased
The superior lessor if sub-let
If not leased, the person entitled to let the property

If these individuals default, the occupier of the building becomes liable.

Calculation of Odisha Property Tax

Holders of any property within corporation limits must pay Holding Tax at 20.5% of the property's annual rental value, determined by residential or commercial use. The calculation method is as follows:

Annual Rental Value = Annual Rental Value per square foot x Total built-up area (in square feet)

Annual Rental Value Calculation:

a) Residential:
The Annual Value of a residential holding is calculated with these steps:

Plinth area in Sq. Meter x Rs 13.65
Deduct 15% for repair & maintenance
Add 0.5% of the land cost (as per G.A. Department Notification dated 01.05.1998)

Holding tax of 20.5% of the Annual Value is applied, which includes Latrine Tax of 2.5% and Street Light Tax of 5%.

b) Commercial holding:
The Annual Value for a commercial holding is assessed by:

Adding Civil Cost + P.H & Electric fitting cost
Calculating 7.5% of this value
Adding 0.5% of the land cost
Paying 20.5% of the value from Step III

c) Residential holding on rent:
To calculate tax for rented holdings:

Calculate monthly rent x 12
Deduct 15% for maintenance
Add 0.5% of the land cost
Determine annual value as Step I plus Step III minus Step II

Note: Government buildings and institutions receive a 10% Holding Tax exemption under the Act.

Categories of buildings and rates of annual rental value:

Residential Buildings	Rs 2.00 per sq ft
Small Shops	Rs 5.00 per sq ft
Kalyan Mandap, Gold Shop, Nursing Home, Hotel & Lodging etc.	Rs 7.00 per sq ft
Bank, Insurance, Companies & Show Rooms	Rs 10.00 per sq ft

Failing to comply with the Act's provisions can result in penalties.

Online Payment of Odisha Property Tax

Odisha citizens can pay holding/property tax online via the e-Municipality Odisha portal.

Visit the official website of e-Municipality Odisha.
Under “Quick Services,” select Property/Holding Tax.
Select your district and respective ULB from the dropdown.
Log in with your credentials to access the application.
Provide required details and complete the payment.
To view demand or check payment status, click on ‘View Demand/Payment Status’ under property tax services, fill in the details, and search.
After payment, print the receipt.

For detailed procedures on government registrations, consult 6 Must-Know Business Registrations.

Generation of Holding Number

If no holding number exists, apply through the holding number application with the ROR, and CDA approved plan.

Under Property tax services, click ‘Apply online for Holding Number’.
Complete the application form, including Application, Owner, Plot Details, and more.
After entering details, click “Submit” to receive an application number via SMS.
For GST registration queries, visit GST Registration Procedure.

Check Application Status

Under the Property/Holding Tax services, select ‘Check Application Status’.
Enter the application number/date or online request number, then click “Search”.
Application number and status will display on screen.
To understand related regulatory authorities, read about National Financial Reporting Authority (NFRA).

Calculate Property/Holding Tax

In Property/Holding Tax services, select ‘Calculate Property/Holding Tax’.
Choose the Method and Building Type.
Fill details for Land Value (GA) or others, then click “Calculate Tax”.
The tax amount will be displayed on the screen.
To understand collateral-free funding options, see Loan Without Collateral in India.

Note: Apply for re-assessment if necessary, detailing new construction, floors, rooms, or usage.

For additional information on machinery valuation for tax purposes, refer to Valuation of Second Hand Machinery.

For more about important legal notifications, visit Income Tax Notice Pricing.

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Frequently Asked Questions

Common questions about Odisha Property Tax.

Property tax in Odisha, also known as holding tax, is a direct tax levied on real estate properties such as residential buildings, commercial buildings, and industrial buildings. It is a significant source of revenue for the local government and is utilized for various public services like constructing libraries, repairing roads, and sanitation.

The property tax in Odisha is calculated as 20.5% of the annual rental value of the property, which is determined based on the nature of the property (residential or commercial) and its built-up area. The annual rental value is calculated using different formulas for residential and commercial properties, taking into account factors such as plinth area, repair and maintenance costs, land cost, and civil construction costs.

According to the Odisha Municipal Act, 1950, the responsibility for paying property tax lies with the owner or joint owners of the property. If the property is leased, the lessor or the superior lessor (in case of sub-letting) is responsible. If the property is not let out, the person who has the right to let it out is responsible.

Yes, citizens of Odisha can make online payment of property tax (holding tax) through the e-Municipality Odisha online portal. The portal provides a step-by-step process for paying property tax, checking demand or payment status, and generating a receipt.

If a holding number has not been assigned or the building has not yet been assessed for property tax, you can apply for a holding number online through the e-Municipality Odisha portal. The application process requires details such as the Record of Rights (ROR) of the land, CDA-approved building plan, cost of construction, and owner's information.

You can check the status of your property tax application in Odisha through the e-Municipality Odisha portal. Under the "Property/Holding Tax services," select "Check Application Status" and enter your application number, application date, or online request number to view the current status.

Yes, the e-Municipality Odisha portal provides an online facility to calculate the property tax amount. Under the "Property/Holding Tax services," select "Calculate Property/Holding Tax" and provide the required details such as the method of calculation (Annual Rent Value or Unit Area), building type (residential, commercial, or industrial), land value, and other relevant information.

According to the Odisha Municipal Act, 1950, government buildings, government hospitals, government educational institutions, government cultural institutions, and other such government institutions are exempted from paying 10% of the property tax (holding tax).

Failing to pay the property tax (holding tax) as per the provisions of the Odisha Municipal Act, 1950, can invoke penalties under the Act. However, the article does not provide specific details regarding the nature or amount of these penalties.

Yes, according to the article, the terminology "holding tax" is used to depict property tax in Odisha. However, the state government has planned to introduce property tax and phase out the term "holding tax" for all municipal bodies and urban local bodies in the state, which will require amendments to the existing Acts.