Paid Excess Property Tax? Adjust in Next FY

Since April 1, the Chandigarh Municipal Corporation has collected nearly $5 crore in property taxes, after the implementation of the threefold increase in tax rates for residential properties and a twofold hike for commercial properties. However, the administration has decided not to refund the extra tax collected due to revised rates. In fact, this extra collected amount will be adjusted in the property tax bills from the 2026-2027 financial year for those who paid based on the earlier rates. 

In response to public protests, the administration has slightly lowered the property tax hikes. Residential property tax increases were lowered from three to two times, and commercial tax was reduced 6% of the annual rateable value to 5%.

As per a UT administration statement, property owners who have already paid the tax based on the March 31 notification will have the excess amount adjusted in the upcoming year tax bills. An official said that it could be challenging to refund the excess tax to all the taxpayers, prompting the decision to carry out adjustments in the following financial year.

The Municipal Corporation had already distributed around 10,000-12,000 property tax bills based on the previously increased rates but now, it will issue fresh bills as per the revised tax structure. The officials indicated that the updated bills will be distributed shortly to accommodate those who have not yet paid, urging them to settle their dues at the newly reduced rates.

In Chandigarh, there are a total of 1.42 lakh properties; among them 1.12 are residential while 30,000 are reported to be commercial. Commercial properties are the biggest contributor to the tax revenue. Municipal Corporation had collected around ₹5 crore with over 9,000 taxpayers making payments. Residential property owners, numbering over 8,200, paid a total of ₹3.72 crore, while 840 commercial property owners paid the remaining amount.

The rebate structure remains unchanged even after the revised tax rates. For the financial year 2025-2026, the residential property owners will receive a 20% rebate and commercial property owners will receive a 10% rebate for the payments made in April and May. Payments made after May 31 will incur a 25% penalty plus 12% interest.

With revised tax structure and incentives for early payment, the property owners in this city are urged to clear their due by the end of May to keep penalties away. To gain more clarity on property tax, consult Setindiabiz’s tax experts.