The Times of India 29.06.2010
Panel proposes upgrading some colonies for tax
NEW DELHI: With property prices rising in the city over the years, the third municipal valuation committee's interim report has recommended that the MCD should either widen its tax base or go for a hike in tax.
The committee has also proposed a re-categorization of over 200 colonies, out of a total of 3,000, observing that the move will augment the civic agency's revenues by around Rs 500 crore per annum.
In its report submitted to the chief secretary, Rakesh Mehta, and the MCD commissioner, K S Mehra, last week, the committee — constituted by Delhi government to review property tax in the city — has said that property prices across the capital have risen by 40% in the past three years while the civic agency has managed to collect just 25% of the tax that can be mopped up.
The report has proposed that 17 colonies that are now in category B should be upgraded to A, 62 C category colonies be put in category B and 57 D category colonies be promoted to category C.
"The criteria for re-categorising a colony includes its proximity to a market area or malls, road network, whether it is a DDA planned colony or not, the civic facilities available there and the Metro," said an MCD official. "Any colony located within 500 metres of a Metro line will have to pay more tax."
For a 100 square metre property, under the jurisdiction of MCD, the current annual property tax rate is approximately Rs 5,670, Rs 5,000, Rs 3,000 and Rs 2,500 for properties in categories A, B, C and D, respectively.
If MCD accepts the recommendations of the committee, there will be a major change in the tax slab for upgraded colonies. Areas under the jurisdiction of MCD are at present divided into categories A to H. At present, there are 28 category A colonies in Delhi. These include areas like New Friends Colony, Vasant Vihar and Shanti Niketan. Category B includes colonies like Defence Colony and GK-I.
"There has been a decline in property tax collections since the unit area method for calculating property tax was introduced in 2004," said an MCD official. "The panel's report is, however, only an interim report and the decision to increase tax rates is the exclusive jurisdiction of the deliberative wing of the MCD." Similar proposals were made by the committee in 2007 but they were not implemented by MCD.
The committee has also proposed a re-categorization of over 200 colonies, out of a total of 3,000, observing that the move will augment the civic agency's revenues by around Rs 500 crore per annum.
In its report submitted to the chief secretary, Rakesh Mehta, and the MCD commissioner, K S Mehra, last week, the committee — constituted by Delhi government to review property tax in the city — has said that property prices across the capital have risen by 40% in the past three years while the civic agency has managed to collect just 25% of the tax that can be mopped up.
The report has proposed that 17 colonies that are now in category B should be upgraded to A, 62 C category colonies be put in category B and 57 D category colonies be promoted to category C.
"The criteria for re-categorising a colony includes its proximity to a market area or malls, road network, whether it is a DDA planned colony or not, the civic facilities available there and the Metro," said an MCD official. "Any colony located within 500 metres of a Metro line will have to pay more tax."
For a 100 square metre property, under the jurisdiction of MCD, the current annual property tax rate is approximately Rs 5,670, Rs 5,000, Rs 3,000 and Rs 2,500 for properties in categories A, B, C and D, respectively.
If MCD accepts the recommendations of the committee, there will be a major change in the tax slab for upgraded colonies. Areas under the jurisdiction of MCD are at present divided into categories A to H. At present, there are 28 category A colonies in Delhi. These include areas like New Friends Colony, Vasant Vihar and Shanti Niketan. Category B includes colonies like Defence Colony and GK-I.
"There has been a decline in property tax collections since the unit area method for calculating property tax was introduced in 2004," said an MCD official. "The panel's report is, however, only an interim report and the decision to increase tax rates is the exclusive jurisdiction of the deliberative wing of the MCD." Similar proposals were made by the committee in 2007 but they were not implemented by MCD.
