Property Tax in India: City-Wise Rates, Calculation Methods, Exemptions, and the Hidden Charges Nobody Tells You

The Same 1000 sq ft Flat — 40x Tax Difference Across Indian Cities

A 1000 sq ft self-occupied residential flat, 10-15 years old, pays this much in annual property tax:

City	Annual Property Tax	Calculation System	What Drives the Number
Mumbai (Andheri)	Rs 60,000–82,500	Capital Value (CVS)	Ready Reckoner Rate
Mumbai (Thane)	Rs 15,000–45,000	CVS	Lower RRR zone
Pune	Rs 8,000–20,000	CVS	RRR + zone classification
Bangalore (Zone C-D)	Rs 3,600–5,400	Unit Area Value (UAV)	Zone classification
Delhi (Category B-C)	Rs 3,500–5,000	UAV	Colony category (A-H)
Hyderabad	Rs 3,000–8,000	Annual Rental Value (ARV)	Monthly Rental Value slab
Chennai	Rs 2,000–6,000	ARV	Zonal rental rate
Kolkata (Category C-D)	Rs 2,500–5,000	UAV	Block category (A-G)
Ahmedabad	Rs 1,500–3,000	UAV	Location factor

Mumbai’s property tax is 20-40x higher than Ahmedabad’s for the same built-up area. The difference is not about services or infrastructure — it is entirely about the calculation method. Mumbai ties tax to market value (which has skyrocketed), while other cities use administratively set rates that are kept artificially low.

Even Mumbai’s Rs 82,500 is absurdly low by global standards. A Rs 30 crore luxury flat in Mahalaxmi is assessed at only Rs 1.9 crore by the government — 6% of market value. The same property in Manhattan would pay Rs 45 lakh annually, not Rs 1.4 lakh.

India collects property tax at 0.15% of GDP — half the rate of low-income countries and one-sixth of the OECD average (1.1%). Only 5-20% of potential property tax is actually collected.

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The Three Calculation Systems — Why Your City Matters More Than Your Flat

Capital Value System (CVS) — Mumbai, Pune

Formula: Property Tax = Capital Value x Tax Rate x Usage Weight

Where Capital Value = Ready Reckoner Rate per sq ft x Carpet Area x Construction Type Weight x Age Weight

Mumbai rates and weights:

Factor	Value
Residential tax rate	0.4%–0.8% of capital value
Commercial tax rate	1.2%–2.3%
RCC/Bungalow weight	1.0
Semi-permanent weight	0.60
Under-construction weight	0.50
Pre-1945 age weight	0.80
Post-1985 age weight	1.0
Residential usage weight	1
Commercial usage weight	3
Hotel usage weight	4

CVS is the most expensive system because it directly links to market prices. When Mumbai’s Ready Reckoner rates were revised 3.39% in 2025, residents reported property tax jumps of 26-40% — not the “15%” BMC officially announced. One flat owner’s bill went from Rs 29,211 to Rs 36,898.

The critical exemption: Mumbai flats under 500 sq ft are fully exempt from property tax. Flats between 500-700 sq ft get a 60% concession. This single rule saves lakhs of Mumbai homeowners thousands of rupees annually.

Unit Area Value System (UAV) — Delhi, Bangalore, Kolkata, Ahmedabad

Formula: Annual Value = Unit Area Value per sq ft x Area x Age Factor x Use Factor x Structure Factor x Occupancy Factor

Then: Tax = Annual Value x Tax Rate %

Delhi’s colony categories and rates:

Colony Category	UAV (Rs/sq m)	Residential Rate	Commercial Rate
A (Lutyens, Golf Links)	630	12%	20%
B (GK, Defence Colony)	500	12%	20%
C (Dwarka, Vasant Kunj)	400	11%	20%
D (Rohini, Janakpuri)	320	11%	20%
E	270	11%	20%
F	230	7%	20%
G	200	7%	20%
H (unauthorized colonies)	100	7%	20%

Delhi’s age adjustment factors:

Construction Period	Factor
Pre-1960	0.50
1960-1969	0.60
1970-1979	0.70
1980-1989	0.80
1990-1999	0.90
2000 onwards	1.00

Calculation example — 120 sq m self-occupied residential flat in Category B, built in the 1960s:

Annual Value = 500 x 120 x 0.6 (age) x 1 (use) x 1 (structure) x 1 (self-occupied) = Rs 36,000

Tax at 12% = Rs 4,320/year

Annual Rental Value System (ARV) — Hyderabad, Chennai

Formula: Property Tax = Plinth Area x Monthly Rental Value x 12 x Tax Rate - Depreciation + Cess

Hyderabad’s tax components (based on Monthly Rental Value):

MRV Range	General Tax	Conservancy	Lighting	Drainage	Total
Up to Rs 50	Exempt	Exempt	Exempt	Exempt	Exempt
Rs 51-100	2%	9%	3%	3%	17%
Rs 101-200	4%	9%	3%	3%	19%
Rs 201-300	7%	9%	3%	3%	22%
Rs 300+	15%	9%	3%	3%	30%

Plus 8% library cess on top of the total.

Hyderabad’s building age rebates: 0-25 years = 10% off, 26-40 years = 20% off, 40+ years = 30% off.

ARV cities tend to have the lowest property tax because rental values are set by the municipality and rarely updated to match actual market rents.

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The Rented vs Self-Occupied Trap: Your Rental Yield Just Dropped

This is the number nobody includes in rental yield calculations.

City	Self-Occupied Factor	Rented Factor	Tax Multiplier
Delhi	1.0	2.0	2x
Bangalore (all zones)	Base rate	2x base rate	2x
Hyderabad	Full tax	50% concession if vacant	—
Mumbai	Based on usage	Higher for rented	~1.2-1.5x

What this means for rental yield: A flat generating Rs 2 lakh/year in rent on a Rs 50 lakh property has a gross yield of 4%. If the property tax doubles from Rs 5,000 to Rs 10,000 because it is rented, your net yield drops. Add 30% income tax on rental income, maintenance charges, vacancy periods, and repair costs — the real rental yield on most Indian flats is 1.5-2.5%, not the 3-4% people assume.

For a deeper analysis of how real estate returns compare to financial assets after all costs, see Real Estate vs Mutual Funds — Exposed.

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Senior Citizens, Women, Ex-Servicemen — Rebates You Are Probably Not Claiming

Senior Citizen Rebates (60+)

City	Rebate	Conditions
Pune	50%	Residential property only
Delhi	30%	1 property, up to 200 sq m, self-occupied residential
Mumbai	Up to 30%	Self-occupied primary residence
Ahmedabad	25%	Self-occupied
Bangalore	Partial concession	City-specific application
Chennai	Higher depreciation + lower slab	Combined benefit

Women Property Owner Rebates

City	Rebate	Conditions
Pune	50%	Residential up to 500 sq ft (from FY 2026-27)
Delhi	30%	1 property, up to 200 sq m, self-occupied residential

Ex-Servicemen and Disabled Persons

City	Rebate	Conditions
Delhi	30%	1 property, up to 200 sq m, self-occupied residential
Hyderabad	Full exemption	Military personnel

Early Payment Discounts

City	Discount	Deadline
Ahmedabad	12% (+ 1% online + 2% 3-year history = up to 15%)	Before due date
Delhi	10-15%	By June 30
Bangalore	5%	By May 31
Chennai	5% (max Rs 5,000)	Before due date
Mumbai	2-5%	Before June 30

The Ahmedabad early payment stack is the best deal in India: 12% advance payment discount + 1% online payment bonus + 2% for 3 consecutive years of on-time payment history = up to 15% total discount. On a Rs 10,000 bill, that is Rs 1,500 saved for clicking a button on time.

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What Is Actually Inside Your Property Tax Bill

Your “property tax” is not one tax. It is 6-8 charges bundled into a single bill:

Component	What It Covers	Avoidable?
General Property Tax	Base municipal tax	No
Water Benefit Tax	Municipal water supply	No — payable even if you use borewell (upheld by courts)
Sewerage/Drainage Tax	Drainage infrastructure	No
Conservancy/Safai Charge	Sanitation and cleaning	No
Education Cess	Municipal school funding	No
Fire Cess	Fire department	No
Library Cess	Public libraries (Hyderabad: 8%, Chennai: varies)	No
SWM Cess	Solid Waste Management	No — newly added in Bangalore (April 2025)

Bangalore’s SWM controversy (April 2025): BBMP introduced Solid Waste Management fees integrated into property tax — Rs 10/month for flats up to 600 sq ft, scaling to Rs 400/month for properties above 4,000 sq ft. The criticism: a 2,400 sq ft home with 2 residents pays far more than a 600 sq ft flat housing 10 people. BBMP already has Rs 12,000 crore in collected-but-unspent SWM cess.

These bundled charges add 20-40% on top of the base property tax. Nobody breaks them down for you.

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Penalties — What Really Happens When You Do Not Pay

City	Monthly Penalty	Escalation	Extreme Consequence
Mumbai	2%/month	+1% each successive month	Property lien, title transfer block
Delhi	1%/month	After June 30 deadline	—
Bangalore	2%/month	100% penalty + 15% interest after missing 2 years	Property sealing (Section 142)
Hyderabad	2%/month	After July 31 / Oct 15	—
Chennai	1%/month	After 15-day grace period	—
Ahmedabad	2%/month	Cumulative	Property sealing (2,338 sealed in March 2026)
Kolkata	15% one-time	On outstanding amount	—
Pune	2%/month	After May 31 / Dec 31	Band playing at your door

Pune’s public shaming tactic: The Pune Municipal Corporation has Rs 9,000+ crore in outstanding property tax from 6.06 lakh defaulters. Their recovery strategy includes literally sending a band to play outside defaulters’ homes to publicly shame them into paying.

Ahmedabad’s enforcement: The AMC sealed 2,338 defaulter properties as of March 2026, collecting Rs 91.57 lakh through enforcement action alone.

Amnesty Schemes — The Safety Net That Rewards Defaulters

Cities periodically offer One-Time Settlement (OTS) or amnesty schemes:

City	Scheme	What It Waives	Result
Delhi	SUNIYO (2025-26)	100% of all pre-2020-21 dues, interest, penalties	Rs 1,032 crore from 1.78 lakh taxpayers
Hyderabad	OTS (2025-26)	90% of accumulated interest	Rs 548 crore contribution to record Rs 2,501 crore collection
Bangalore	BBMP OTS (2024)	Interest waiver + Rs 100/year nominal penalty	Rs 4,274 crore collected
Ahmedabad	Interest waiver (March 2026)	100% interest waiver (residential), 75% (commercial)	Ongoing

Delhi’s SUNIYO scheme is the most generous: pay your principal tax for 2020-21 through 2025-26 and everything before that — tax, interest, and penalties — is waived completely. The 48% jump in collections proves that most non-payment is about accumulated penalties making the bill too large to pay, not about refusal.

Should you intentionally default and wait for amnesty? Risky. There is no guarantee your city will offer amnesty before enforcement. Ahmedabad sealed 2,338 properties in March 2026 without warning. Bangalore can seal your property after just 2 years of non-payment.

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Property Tax and Income Tax — The Deductions You Are Missing (Or Silently Lost)

How Municipal Tax Fits Into Income Tax

Municipal taxes actually paid during the financial year are deducted from Gross Annual Value to arrive at Net Annual Value of property. Here is the full chain:

For let-out (rented) property:

1. Gross Annual Value = Actual rent received (or fair market rent, whichever is higher)
2. Less: Municipal taxes actually paid during the year
3. = Net Annual Value
4. Less: 30% standard deduction under Section 24(a)
5. Less: Home loan interest under Section 24(b) — unlimited for let-out property
6. = Income from house property (can be a loss)
7. Loss from house property capped at Rs 2 lakh per year; excess carried forward 8 years

For self-occupied property:

1. Annual value = NIL (no income to tax)
2. Home loan interest deduction under Section 24(b) = up to Rs 2 lakh
3. But only under old tax regime

For a complete walkthrough of home loan tax benefits, see Home Loan Tax Benefits — Section 24 and 80C Complete Guide.

The New Regime Trap — You Lost Your Biggest Deduction

Under the new tax regime (Section 115BAC), the Section 24(b) home loan interest deduction for self-occupied property is not available. This silently eliminates the biggest tax benefit of owning a home for anyone on the new regime.

Impact at Rs 15 lakh salary with Rs 2 lakh home loan interest:

• Old regime: Rs 2 lakh deduction at 20% slab = Rs 40,000 tax saved
• New regime: Rs 0 deduction = Rs 0 saved

Most salaried employees auto-opted into the new regime without calculating this. If you have a home loan, run the numbers before locking in. See Old vs New Tax Regime — Which Saves More at YOUR Salary for the breakeven analysis.

Budget 2025 Change: 2 Self-Occupied Properties Now Get NIL Annual Value

Previously, only 1 self-occupied property could have nil annual value. From FY 2025-26, up to 2 self-occupied properties qualify. If you own 3+ properties and all are vacant, the 3rd property onwards is taxed on notional rental income — even if nobody lives there.

For NRI-specific property tax and capital gains rules, see NRI Property Sale — TDS and Capital Gains.

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Property Tax Payment Portals and Deadlines

City	Online Portal	Annual Deadline	Installments
Mumbai (BMC)	ptaxportal.mcgm.gov.in	June 30	Annual
Delhi (MCD)	mcdonline.nic.in/ptrmcd	June 30	Quarterly available
Bangalore (BBMP)	bbmptax.karnataka.gov.in	March 31	Annual
Hyderabad (GHMC)	onlinepayments.ghmc.gov.in	July 31 and Oct 15	Half-yearly
Chennai (GCC)	chennaicorporation.gov.in	Sep 30 and March 31	Half-yearly
Pune (PMC)	propertytax.punecorporation.org	May 31 and Dec 31	Half-yearly
Kolkata (KMC)	kmcgov.in	June 30	Annual
Ahmedabad (AMC)	ahmedabadcity.gov.in	March 31 and Oct 15	Half-yearly

All portals accept UPI, net banking, and card payments. Ahmedabad gives an additional 1% discount for online payment.

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Buying Resale Property? Check Property Tax Arrears First

The buyer is not legally liable for property tax arrears incurred before purchase. But in practice, municipal authorities pursue the current owner — you.

Real case: A flat buyer (2016 purchase) discovered 12 years of unpaid property tax totaling Rs 50,000 after moving in. The real estate agent had collected Rs 50,000 for a “builder NOC” but did not disclose the tax arrears. Legal advice: the buyer must pay first, then recover from previous owners through civil suit.

Pre-Purchase Checklist

1. Get original tax paid receipts and latest bill from the seller
2. Verify clearance directly with the municipal corporation — do not rely on the seller’s word
3. Include an indemnity clause in the sale agreement: seller indemnifies buyer against all pre-sale property tax liabilities
4. Get an encumbrance certificate to verify no liens or pending demands
5. Check the Khata/mutation status — in Bangalore, without Khata transfer, you cannot pay property tax in your name

The Builder Owes Property Tax Until Conveyance

Under Section 6 of MOFA (Maharashtra Ownership Flats Act, 1963), the builder must clear all municipal taxes, property tax, and water charges until the property is transferred to flat purchasers or the cooperative housing society.

Yet thousands of Mumbai cooperative societies still pay property tax and water charges at commercial rates because builders have not completed conveyance. If your society is in this situation, you have legal grounds to demand the builder clear arrears and complete conveyance.

Properties occupied without an Occupancy Certificate (OC) attract double property tax in Maharashtra and Karnataka, plus 50% higher water connection charges.

If you are selling property and need to understand the capital gains tax implications, see Capital Gains Tax on Property Sale — 12.5% vs 20% Indexation and Section 54 Capital Gains Exemption.

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Property Tax After Renovation, Floor Addition, or Usage Change

Municipal authorities can reassess and increase your property tax whenever you:

• Add a floor or extend built-up area
• Convert residential to commercial use
• Demolish and reconstruct
• Make structural alterations

You are legally required to inform the municipality. Failure to report triggers penalties and back-dated tax demands — potentially years of differential tax plus 2% monthly interest.

The commercial conversion hit: Converting a residential property to commercial use typically increases property tax by 2-3x because commercial rates are that much higher across all cities. A home office technically used for business may attract commercial rates if the municipality classifies it as commercial.

Mumbai’s cap: When capital value is revised (every 5 years), the tax increase is capped at 40% of the previous year’s tax — providing some protection against sudden jumps.

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Under-Construction Properties — You Owe Tax Before You Move In

Municipal property tax is technically payable from the time you own the property, because the municipality provides infrastructure (roads, water, drainage) to the area regardless of construction status.

Aspect	Municipal Tax	Income Tax
When it starts	From ownership/possession date	Deductions only after completion
Under-construction rate	Mumbai: 50% of regular rate	Section 24(b) and 80C: NOT available until completion
Pre-construction interest	Not applicable	Claimable in 5 equal instalments from year of completion
OC requirement	Not required for tax levy	Required to claim tax benefits

The gap: You pay municipal property tax during construction but cannot claim any income tax deductions until the builder provides the Occupancy Certificate. This creates a 2-5 year period where property tax is a pure outflow with no tax offset.

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Vacant Land Tax and Agricultural Land

Vacant urban land is taxable by municipal authorities but at reduced rates:

• Mumbai: Weight factor 0.50 (half the rate of built property)
• Delhi: Occupancy factor 0.60 (60% of self-occupied rate)

Agricultural land is generally exempt from municipal property tax. Delhi explicitly exempts agricultural land. Agricultural income is exempt under Section 10(1) of the Income Tax Act. However, urban agricultural land is treated as a capital asset — capital gains apply on sale, though Section 54B exemption is available if you reinvest in agricultural land within 2 years (cap: Rs 5 lakh from FY 2025-26).

For inherited property tax implications, see Capital Gains Tax on Inherited Property.

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GIS Drones Are Coming — 49% of Bangalore Properties Are Not on Tax Rolls

BBMP estimates only 20 lakh of 42 lakh properties in Bangalore are registered for property tax. That means roughly half the city is not paying.

Technology is changing this fast:

City	Method	Evasion Detected
Bangalore	Drone aerial survey	Rs 318 crore across 13,600 properties
Bangalore	GPS door-to-door survey	Rs 370 crore across 10,000 properties; 49,000 show-cause notices
National	Drone property mapping	84 million parcels digitalized through 272,000+ surveys
Pune	GIS mapping	Property roll growth jumped from 2% to 7% annually; collections grew 290% in a decade

How GPS surveys work: Teams visit every property with mobile apps, recording GPS location, usage type, actual area, and number of floors. This data is cross-referenced with drone imagery and existing tax records. Discrepancies automatically generate show-cause notices with applicable tax, interest, and penalty.

If you have self-assessed your property tax incorrectly — wrong area, wrong usage category, wrong number of floors — a drone survey will find you. The penalty for wrong self-assessment information is up to 30% of the property tax.

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Commercial vs Residential — The 3x Multiplier

If you are considering buying commercial property for rental income, factor in the property tax multiplier:

City	Residential Rate	Commercial Rate	Multiplier
Mumbai	0.4%–0.8%	1.2%–2.3%	2-3x
Delhi	7-12% (of annual value)	20%	1.5-3x
Kolkata	Residential factor 1.0	Shops 2.0, Malls 6.0, Night clubs 7.0	2-7x

Kolkata’s Kolkata multiplier: Night clubs pay 7x the residential property tax rate. Multiplexes and malls pay 6x. Even basic commercial shops pay 2x.

A commercial property generating 7-8% rental yield looks attractive until you add 2-3x property tax, higher maintenance charges, and 18% GST on rent above Rs 20 lakh/year. The net yield often drops to 4-5% — not dramatically better than residential.

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The A Khata vs B Khata Problem (Bangalore)

If you are buying property in Bangalore, this is critical.

A Khata properties are legally compliant — meeting all BBMP building bylaws, taxation norms, and regulations. They are eligible for bank loans, building approvals, and smooth resale.

B Khata properties violate building bylaws. After a December 2014 Karnataka High Court order, B Khata properties lost their legal standing. No building license, no trade license, no bank loans.

Yet hundreds of thousands of B Khata properties exist in Bangalore, occupying a legal grey zone where they pay property tax but cannot get formal recognition. Owners are trapped — they own a taxed but technically illegal asset.

To convert B Khata to A Khata: You need DC-converted land, payment of all property taxes to date, and payment of Betterment Charges levied by BBMP. Without A Khata, you cannot transfer property tax to a new owner’s name after purchase.

For RERA-related property checks, see How to Verify RERA Registration — Fake Builder Check.

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Municipal Tax Collection Rankings — How Much Your City Collects

City	FY 2024-25 Collection	Notable
Mumbai (BMC)	Rs 6,198 crore	Highest despite only 500 sq ft+ paying
Bengaluru (BBMP)	Rs 4,930 crore	~49% properties off-rolls
Pune (PMC)	Rs 2,365 crore	Rs 9,000 crore outstanding
Hyderabad (GHMC)	Rs 2,501 crore (FY26)	Record year via OTS scheme
Delhi (MCD)	Rs 2,024 crore	SUNIYO boosted 48%
Chennai (GCC)	Rs 2,000 crore	Stable
Ahmedabad (AMC)	Rs 1,739 crore	2,338 sealings drove compliance
Kolkata (KMC)	Rs 1,259 crore	10% five-yearly revision from April 2025

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10 Mistakes That Cost You Money on Property Tax

1. Not claiming senior citizen/women owner rebate — up to 50% savings in Pune, 30% in Delhi and Mumbai
2. Missing early payment deadline — Ahmedabad gives up to 15% discount; you are leaving money on the table
3. Wrong area measurement — using super built-up area instead of carpet area inflates your tax
4. Not checking the colony/zone category — your flat might be in a lower-tax zone than you think
5. Ignoring the self-occupied vs rented distinction — Delhi and Bangalore charge 2x for rented properties
6. Paying without checking for active amnesty schemes — Delhi’s SUNIYO wiped out pre-2020 dues entirely
7. Not keeping payment receipts — needed for property sale, loan applications, and income tax filing
8. Not informing municipality about ownership change — leads to notices sent to previous owner
9. Auto-paying the builder’s assessment — new flat property tax is often over-assessed; verify the zone and area
10. Choosing new tax regime without calculating home loan impact — Section 24(b) deduction is dead under 115BAC for self-occupied property; this can cost Rs 40,000/year in lost tax savings

For the complete guide on all available deductions including property-related ones, see 80C to 80U Deductions — Complete Guide.

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How to Check and Pay Your Property Tax — Step by Step

1. Find your Property ID / Assessment Number — on your previous tax receipt, sale deed, or by searching your name on the city portal
2. Verify the assessment details — check area, zone, usage type, age, and occupancy status. If anything is wrong, file a correction/objection with the municipal office
3. Calculate your tax — use the city portal’s self-assessment calculator. Cross-check against the rates in this article
4. Apply exemptions — senior citizen, women owner, or ex-servicemen rebates require a one-time application with ID proof
5. Pay before the deadline — to claim early payment discounts (5-15% depending on city)
6. Download and save the receipt — you need it for income tax filing (municipal taxes paid reduces your house property income)

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Disclaimer: Property tax rates, zones, and exemption rules change frequently. The rates in this article are based on the latest available information as of April 2026. Always verify current rates on your city’s official municipal portal before making payments. This article is for informational purposes only and does not constitute tax advice.