Taxation

BBMP can rake in Rs 4,500 cr, if only it tries

Thursday, 02 January 2014 11:42 administrator

Deccan Chronicle 02.01.2014

BBMP can rake in Rs 4,500 cr, if only it tries

Bangalore: The BBMP maybe on its deathbed financially, but the civic agency has the potential to earn at least Rs 4,500 crore property tax per annum and get itself out of the red.

If the property tax is collected properly, the BBMP can tide over its financial crisis in the next three years.

The estimation was given by Yediyur corporator N.R. Ramesh, who has conducted an extensive survey on the number and nature of buildings across the city and the property tax payable by them.

Giving details at the palike council meeting on Tuesday, he said that the BBMP has over six lakh commercial buildings and over 16 lakh non-residential buildings within its limits.

In its eight zones, the BBMP has not less than 30 buildings which fetch over Rs 5 crore property tax per annum. About 60 buildings have the potential to bring in Rs 3 crore, 125 buildings Rs 2 crore, nearly 400 buildings with the potential for Rs 1 crore and around 1,300 buildings Rs 50 lakh.

These have been classified as high-value assessment structures.

The BBMP has, in its limits, 1.1 lakh industrial buildings, 22,000 apartment structures, 8,000 paying guest accommodations, 53 tech parks, 107 commercial malls, 891 marriage halls, 1,200 party halls, 441 star hotels, 2,450 lodges and 2,446 medical institutions.

Ramesh said that unfortunately, the BBMP authorities are so inept that only 25 per cent of the property tax is being collected in the city, while the BBMP revenue wing is struggling to meet the target of Rs 2,000 crore per annum.

The officials need not measure the buildings. Instead, they can take details of the sanctioned building plan from the BBMP official website and re-validate them to fix the property tax. Even wrong declarations made in the Self Assessment Scheme (SAS) can be detected with this method, he suggested.

Earlier, Congress opposition leader in the council Manjunath Reddy said that despite Comptroller and Auditor General Report ordering the recovery of Rs 750 crore, the BBMP has failed miserably to collect it.

House Tax in NDMC area increased

Saturday, 28 December 2013 05:33 administrator

The Hindu 28.12.2013

House Tax in NDMC area increased

Come 2014 and owners of individual properties in the New Delhi Municipal Council area will see an increase in their house tax by 20 per cent.

According to a proposal passed by the civic agency, the per unit rate has been increased to Rs.1,200 from Rs.1,000 which the residents were paying till now.

The house tax will be levied from the coming financial year on individual covered property spread over an area of more than 200 square metres.

Corporation property tax to go up from next fiscal

Saturday, 28 December 2013 05:15 administrator

The Hindu 28.12.2013

Corporation property tax to go up from next fiscal

Biju Govind

New regime may have retrospective effect from April 1, 2013

Property tax for residential and commercial buildings in the Kozhikode Corporation limits will undergo a major revision from next fiscal. The new tax regime, which is expected to have retrospective effect from April 1, 2013, is being adopted after 20 years in the city.

Deputy Mayor P.T. Abdul Latheef said that the process of revising the tax structure had already began at the Corporation office. The council had approved the notification revising the taxes. However, the new rates would be notified only after obtaining suggestions and opinions from the public.

The implementation of the new system will also see the existing revenue wards switching over to the electorate ward. As of now, the revenue and electoral ward numbers are different. For example, the revenue ward number of Malaparamba is 34 while its electoral ward is 8.

Expanded boundaries

The new numbering system has been considered after the merger of Elathur, Beypore, and Cheruvannur-Nallalam grama panchayats to extend the boundaries of the city. Now the Corporation has 75 wards and the total area of the city is 118.5 sq km (earlier 84 sq km).

Before the merger of these three grama panchayats, the Corporation authorities had made attempts to revise the tax structure and new houses numbers had also been given. (Then Malaparamba had been identified as ward 5, both as the revenue and electoral number). Now this would be cancelled and new house numbers would be given, Prof. Latheef says.

The revised property tax is based on the carpet area of the building unlike the existing system calculated on the annual rental value. The tax structure has been finalized on the basis of the guidelines issued by the State government. The building owners should then calculate the property tax based on various norms.

Prof. Latheef said that owners of houses and commercial buildings had been paying tax that had been calculated in the old and unscientific system since 1994. There are cases of households remitting a tax as low as Rs 9 a year. Now the minimum tax to be paid a year would be raised to Rs 50. However, the hike in tax would be between 25 and 60 per cent of the existing rate.

Exemption

Houses having an area of less than 30 sq m would be exempted from paying taxes. This would be applicable for houses constructed with the assistance of State and Central aided funds.

He said that the revision in property tax would not make a big difference on houses and commercial buildings that had been constructed in the last four- five years. The tax structure of these buildings had already been calculated on the carpet area.

The city has been divided into primary, secondary and tertiary zones. An area having a government or a quasi-government office, educational institution, commercial complex, market, bus station, railway station and hospital will be in the primary zone.

The places surrounding a primary zone with potential to evolve into developed areas will be in the secondary zone. Areas not coming under either category will be in the tertiary zone. House owners have to make their own assessment of the property tax. This will be verified by the revenue officials, Prof. Latheef said.

The general tax rate fixed for an area in the primary zone is in the range of Rs.8 to Rs.20 a square metre (1 sq m = 10.76 sq ft) for residential buildings. Buildings in the secondary zones will get a 10 per cent concession on rates and those in the tertiary zone, 20 per cent. Similarly concessions would be given based on the locality of the building; the materials used, including roofing and flooring types, age and carpet area.

At the same time higher rates have been fixed for buildings with areas between 200 sq m and 300 sq m and above 300 sq m.

NMC revenue through LBT drops by 5.8%

Saturday, 28 December 2013 00:00 administrator

The Times of India 28.12.2013

NMC revenue through LBT drops by 5.8%

NASHIK: The revenue of the Nashik Municipal Corporation (NMC) through local body tax (LBT) has declined by 5.8% to Rs 442.72 crore by December in the current fiscal, as against Rs 470 crore during the corresponding period last year (2012-13).

The new tax system came into effect in the limits of the municipal corporation from May 22 this year, replacing the previous octroi. Earlier, octroi was the main source of income as the NMC would earn 62% of the total revenue through it. After the octroi system was scrapped, LBT has become a major source of income of the municipal corporation. However, the NMC has not received good response from the traders, as around 60% of the total LBT-registered traders and businessmen are not paying the tax since its commencement.

Of Rs 442.72 crore collected this year, Rs 301.56 crore was generated through LBT, Rs 11.27 crore through escort duty, Rs 23.47 crore through stamp duty and Rs 106.42 crore through octroi (collected between April and to May 21).

Speaking to TOI, an NMC official said, "We are yet to receive good response for LBT from the traders and businessmen. This is a major reason due to which LBT collection has declined by 5.8%. Moreover, market, industry, real estate and other segments are facing slowdown due to which there has been decrease in the revenue generated through LBT. We have decided to take action against tax evaders. Therefore, we are optimistic that the revenue of the NMC through LBT will definitely increase in the last quarter (December to March) of the current fiscal."

Around 23,500 traders and industrialists have been registered with the LBT, but only 9,000 of them are paying taxes. The proportion of tax payers is only 40%. The NMC has decided to take action by confiscating movable and immovable properties of the tax evaders. As part of this, notices have been served to 2,000 traders so far.

Penalty for defaulters of property tax: Nashik Municipal Corporation

Tuesday, 24 December 2013 11:57 administrator

The Times of India 24.12.2013

Penalty for defaulters of property tax: Nashik Municipal Corporation

NASHIK: The civic body has decided to penalize property owners who fail to pay their taxes by December 31.

The owners will be fined 2% of their monthly property tax and the amount will be included in the next bill.

The Nashik Municipal Corporation (NMC) would earlier send property tax bills for the entire financial year. But it has introduced a half-yearly system this fiscal year - 2013-14. The bills for both the periods - April 1 to September 30 and October 1 to March 31 - were sent to property owners this year.

The civic body has made it mandatory for the bill payments to be made by December 31. The 2% fine on the total property tax is applicable thereafter.

A civic official told TOI, "The decision to impose the fine has been taken with an aim to increase the NMC's revenue through property taxes. The civic body is already facing the heat from the decline in revenue through the local body tax. The half yearly bills have been introduced to reduce the burden on property owners of paying the entire tax amount at one time."

He further said, "We have tied up with a private bank for the property tax collection. The owners can pay their taxes at any branch of the bank in the city." The NMC has earned Rs 40.26 crore in the first half (April-September) of the current fiscal year, against the Rs 25.69 crore it collected in the corresponding period last fiscal.

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