Urban News

The Pioneer  09.12.2010

Staff Reporter | New Delhi

While presenting the deficit budget estimate of Rs 117.15 crore, Municipal Commissioner KS Mehra on Wednesday proposed five per cent hike in property tax rate in the Capital for each category for 20011-12. Citing couplets from magnum opus ‘Raghuvansham’ authored by Kalidas, he justified the proposed increase and said tax is to establish balance between administration work and social welfare.

“It was only for the prosperity and welfare of the people that he (the king) took tax from them, just like the sun drawing moisture (from the earth) to give it back in thousand fold measure (as beneficial rain),” he said during his 90-minute Budget speech in special Standing Committee meeting.

However, soon after the budget speech, Standing Committee Chairman Yogender Chandolia rejected outright the proposal to increase taxes. He asserted that even a debate will not be held on the issue. On the other hand, Mehra seemed to be confident. He said he would convince the deliberative wing of the civic body to approve the planned augment in the rate of the property tax.

Earlier in his speech, Mehra said earned revenue would be mainly spent on green initiatives, roads, parking projects, education and to improve facilities in hospitals. The priority is to provide better public facilities in Delhi, he added.

The top official of the civic body added with the enhanced revenue, best international practices will be implemented for better financial, debt and expenditure management, personnel training scheme. “Our aim will be optimal utilization of limited resources available,” he said.

The Municipal Corporation of Delhi (MCD) proposed to increase tax rates for residential properties from existing 12 per cent to 17 per cent for A and B categories, from 11 per cent to 16 for C, D and E categories and from seven per cent to 12 per cent for F, G and H categories. The MCD has divided properties into eight categories on the basis of areas where they are located. Five per cent hike has also been mooted for residential properties of Government companies and statutory corporations, non-residential properties of all categories and residential farmhouses.

No change is proposed for special non-residential properties, like three-star hotels and above, malls, AC gyms and clubs with swimming pools, as they are already giving the highest possible 20 per cent tax, Mehra said.

“The property tax rates are proposed to be increased by five per cent uniformly in all categories except for Airport Authority of India properties, non-residential farmhouses and special non-residential properties,” he said.

The Commissioner also said that the rebate on timely payment of tax is proposed to be reduced to 10 per cent from 15 per cent and there will be no additional rebate on properties up to covered area of 100 sqm, co-operative group housing societies and aided schools.

Mehra said with the proposed increased in property tax rate, the civic body is expected to earn Rs 570 crore. “We are expecting to get Rs 100 crore with the five per cent hike in property tax rate. After implementation of the recommendation of 3rd Municipal Valuation Committee, the Corporation will earn Rs 370 crore and if arrears are settled this year, it will earn Rs 100 crore,” he said.

At present, only 9.5 lakh properties are under the ambit of property tax in the city against 25-30 lakh properties. Mehra said in the coming fiscal, the MCD is also targeting to widen its tax net and will attempt to bring nine lakh more properties under it.