Indian Express 10.12.2009
Property tax goes up 5%, professional tax comes in
The Municipal Corporation of Delhi (MCD) has proposed a hike in property tax rates in the 2010-11 financial year to boost its revenue collection.
Presenting a budget of Rs 6,346.70 crore on Wednesday, Municipal Commissioner K S Mehra proposed increasing property tax rates by 5 per cent across all categories.
Besides the 5-per cent flat hike, the budget proposes tax for rented and self-owned luxury commercial properties be charged at 20 per cent and 15 per cent respectively. These luxury commercial properties — starred hotels, malls, air-conditioned gyms, swimming pools and clubs, among others — are charged a 10-per cent tax at present.
Mehra also proposed a new professional tax for all Delhi residents, including traders and government employees, with a minimum monthly income of Rs 30,000. He said the proposed tax would be charged at the rate of Rs 100 to Rs 200 per month. Such tax is levied in cities like Chennai and Kolkata.
Denying charges that the civic body is proposing to hike property tax to make up for a decline in collection in the ongoing fiscal, Mehra said the MCD has in fact seen an increase in collection so far this year. According to details provided by him during the budget presentation, MCD has collected Rs 502 crore in property tax as of this November 16. The figure stood at Rs 417 crore on the same day last year.
Mehra also refuted Opposition charges that the MCD does not have enough money to meet its expenses and pay salaries to its employees. But, he added, there are many development projects for which the civic body “needs to supplement its revenue collection” — thereby implying that the tax hike proposal is justified.
Mehra said the corporation aims to collect Rs 1,400 crore as property tax in 2010-11 fiscal. To achieve that, he said the MCD has begun a drive with the Survey of India to identify property tax defaulters. He said once completed, results of the survey will enable MCD to bring an additional 30 lakh properties under its tax net.
Mehra said the Corporation has already managed to bring in more government agencies and private property owners under the tax net. He said MCD collected Rs 82.17 crore as property tax from government agencies, including the Central Public Works Department, Airport Authority of India, Delhi Metro Rail Corporation, Jawaharlal Nehru University and the India Trade Promotion Organisation, this fiscal.
Rs 69.51 crore was collected in property tax from these agencies last year, he said.
The municipal chief said 7.5 lakh people had filed property tax returns in the last fiscal — more than 8.3 lakh people have filed their returns so far this year.
According to Mehra, the Municipal Valuation Committee is currently evaluating the unit area method and the need to revise property rates of various colonies based on Consumer Price Index. Once the evaluation is done, the new tax rates will help MCD generate an additional Rs 1,040 crore, according to Mehra.
He claimed that total property tax collected so far this fiscal reveals the increasing popularity of MCD’s online property tax collection method and its general amnesty scheme.
Property tax: net gain?
Rs 502 crore collected as of Nov 16, 2009
Rs 417 crore collected as of nov 16, 2008
8.3 lakh returns filed so far this fiscal
7.5 lakh returns filed in last fiscal
(Figures revealed by Municipal Commissioner K S Mehra during Budget presentation)
Total municipal revenue in 2009-10
Grants 12.60
Assigned taxes 10.87
Taxes and rates 42.88
Rent, fees, fines 2.53
Others 31.12
Total 100
HOW THE RUPEE WILL BE SPEN
Proposed expenditure in 2010-11
General administration 13.62
Licensing 0.11
Community service 2.99
Education 22.79
Public health and medical relief 13.39
Sanitation 13.34
Public works & street lighting (Engineering dept) 15.64
Veterinary services 0.90
Horticulture 3.27
Land and estate 0.49
Exclusive development expenses 6.74
Loan repayment 6.72
Total 100
All figures in paise
