Indian Express 29.06.2010
Panel wants civic body to hike property tax rates
Ayesha Arvind Tags : property tax rates hike, delhi Posted: Tue Jun 29 2010, 00:53 hrs
New Delhi: Ticking off the Municipal Corporation of Delhi (MCD) for its poor property tax collection, the Third Municipal Valuation Committee (MVC), in its final report, has recommended that the MCD increase its tax base or hike property tax rates especially since real estate prices have gone up across the Capital. The MVC has further recommended a consequent re-categorisation of 200 MCD colonies to increase revenues of around Rs 500 crore per annum.In its report submitted before Chief Secretary Rakesh Mehta and Municipal Commissioner K S Mehra last week, the MVC, constituted by the Delhi government to review property tax rates, has said that the real estate value across the Capital has gone up by 40 per cent in the past three years, while the Corporation has managed to collect a mere 25 per cent of its tax targets.
The MVC has recommended that 17 colonies currently falling under Category B of house tax be upgraded to Category A. It has further suggested that MCD re-categorise 62 C category colonies, upgrading those to Category B and 57 D category colonies to Category C. The re-categorisation has been recommended based on road connectivity, proximity to markets and malls, road length, civic facilities and connectivity.
The re-categorisation, say MCD officials, is imperative, considering MCD’s dismal tax collections since the unit area method of tax computation was introduced in 2004. This change, if implemented, will result in a huge jump in property tax.
Areas under the jurisdiction of MCD are at present divided into categories A to H depending on the infrastructural facilities there. Any colony that has a grading of 89 or more in terms of facilities etc, comes under Category A while Category B has gradings between 75 and 88. At present, there are 28 Category A colonies in Delhi, where the tax rates are higher. These include categories like New Friends Colony, Vasant Vihar, Shanti Niketan, South Extension among the many. But the committee’s is only an interim report and while enhancing annual valuation comes under the jurisdiction of Municipal Valuation Committee, the implementation of increase in tax rates is the exclusive jurisdiction of the deliberative wing of the MCD.
