Definition of Usage Category

• Usage category in property tax refers to the declared purpose for which a property is used.
  
• It helps municipal authorities classify properties as residential, commercial, industrial, or institutional.
  
• The usage directly impacts the tax rate applied and the overall tax liability.
  
• It is a key parameter in tax assessment under most municipal valuation systems.
  
• Each category is defined and notified by the local body in tax schedules.
  

Types of Usage Categories

• Residential: Properties used solely for living purposes such as houses and apartments.
  
• Commercial: Used for business activities like shops, offices, hotels, and showrooms.
  
• Industrial: Includes manufacturing units, factories, and warehouses.
  
• Institutional: Schools, hospitals, religious establishments, and government buildings.
  
• Mixed-use: Properties used partly for residential and partly for commercial activities.
  

Impact on Tax Assessment

• Tax rates are lowest for residential and highest for commercial or industrial usage.
  
• Mixed-use properties are taxed proportionately based on the usage of space.
  
• Commercial use attracts additional charges like service fees or cess.
  
• Industrial units may be taxed based on zone classification and pollution category.
  
• Some usage categories may also affect rebate eligibility or exemption status.
  

Declaration and Verification Process

• Property owners must declare the usage category during registration or self-assessment.
  
• Misclassification (e.g., declaring a commercial shop as residential) is penalized.
  
• Municipal officers may verify actual usage through physical inspection.
  
• Changes in usage, like converting a house into a shop, must be reported for reassessment.
  
• Supporting documents or licenses may be needed for verification in certain cases.
  

Importance in Legal and Municipal Records

• Usage category influences zoning permissions, utility rates, and building approvals.
  
• Accurate categorization ensures fair taxation and helps in urban planning.
  
• Government incentives or concessions may be usage-specific.
  
• Banks and institutions check usage type before approving loans or property valuations.
  

Discrepancies in usage classification can lead to legal issues or retrospective dues.