The Chandigarh Municipal Corporation has already collected nearly ₹5 crore in property taxes since April 1, following the implementation of the threefold increase in tax rates for residential properties and a twofold hike for commercial properties. However, the UT administration has decided not to refund the extra tax collected due to the revised rates. Instead, this excess amount will be adjusted in the property tax bills for the 2026-2027 financial year for those who paid based on the earlier rates.
In response to public protests, the administration has slightly reduced the property tax hikes. Residential property tax increases were lowered from three times to two times, and commercial tax was reduced from 6% of the annual rateable value to 5%.
According to 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’s tax bills. An official mentioned that refunding the excess tax to all taxpayers is challenging, 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 will now issue fresh bills with the revised tax structure. Officials indicated that the distribution of updated bills will begin shortly to accommodate those who have not yet paid, urging them to settle their dues at the newly reduced rates.
Out of the 1.42 lakh properties in Chandigarh, 1.12 lakh are residential, and 30,000 are commercial. Commercial properties contribute the most to the tax revenue. By Thursday, the MC had collected approximately ₹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.
Despite the revised tax rates, the rebate structure remains unchanged. For the 2025–2026 financial year, residential property owners will receive a 20% rebate, while commercial property owners will receive a 10% rebate for payments made in April and May. Payments made after May 31 will incur a 25% penalty plus 12% interest.
Conclusion:
Chandigarh’s administration has opted for an adjustment method rather than refunds for the excess property tax collected due to recent rate hikes. With a revised tax structure and incentives for early payment, the city’s property owners are urged to clear their dues by the end of May to avoid penalties. To gain clarity of property tax consult a senior tax expert from Vakilsearch. Our team will provide you clear Insights on the same.
