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Taxation

Tax hike for residential properties unlikely

Thursday, 10 March 2011 06:14 administrator
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The Hindu        10.03.2011

Tax hike for residential properties unlikely

Chitra V. Ramani

Three-year block period comes to an end on March 31

The Bruhat Bangalore Mahanagara Palike (BBMP) is unlikely to hike the tax for residential properties even though the three-year block period comes to an end on March 31.

Highly-placed sources in the BBMP told The Hindu though the proposal to increase property tax rates has been sent to the Standing Committee for Taxation and Finance for approval, most councillors, cutting across party lines, are not in favour.

Recommended hike

The proposal has recommended increase in tax for residential properties by 20 per cent and commercial properties by 25 per cent.

According to Section 108-A (16) of the Karnataka Municipal Corporations Act 1976, the property tax assessed and levied is liable for “revision once in three years by enhancing 15 per cent commencing from the 2008-09 financial year.” The Act states that the BBMP may enhance the property tax up to 30 per cent once in three years and different rates of enhancement may be made to different areas and classes of buildings and lands.

Mandatory but…

Commissioner Siddaiah maintained that it was mandatory to increase the tax rates under the KMC Act. The current rates came into being after the implementation of the SAS in 2008-09. “As per the Act, the rates have to be revised at the end of the three-year block period. We have already sent our proposal to the Standing Committee for Taxation and Finance. After approval by the committee, it will be placed before the BBMP Council.”

Tax rates for commercial properties may be hiked, however. The quantum of hike would be decided at the meeting of the Standing Committee on March 15.

To five years?

Standing Committee chairperson P.N. Sadashiva said that the tax for residential properties may not be hiked anytime soon. “We are considering sending a proposal to the State Government to extend the block period to five years. That would require an amendment in the KMC Act.”

He said that in anticipation of the Government's approval of the BBMP's proposal to increase the block period, the tax rates would not be revised for residential properties. “We will consider all these aspects while deciding whether the tax rates for commercial properties have to be increased,” he added.

  • According to KMC Act, 1976, the tax has to be increased by 15 per cent to 30 per cent
  • Proposal to hike tax before the Standing Committee for Taxation and Finance
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    Property tax board to hear disputes, check for evasion

    Wednesday, 09 March 2011 06:47 administrator
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    Times of India       09.03.2011

    Property tax board to hear disputes, check for evasion

    Sandeep Ashar, TNN | Mar 9, 2011, 12.32am IST

    MUMBAI: Waking up to the massive loss of revenue on account of property tax evasion and to reduce the litigations filed against individual tax levy, the state government has decided to set up an independent property tax board to settle disputes and suggest corrective reforms.

    A proposal to set up the Maharashtra Municipal Tax Board is expected to be put up before the state cabinet on Wednesday. Officials said the objective was to improve the property tax collection system, and suggest ways to introduce reforms in the tax computation and assessment system.

    The setting up of the board is a mandatory condition set by the 13{+t}{+h} Finance Commission for urban local bodies that apply for central grants.

    Officials said the board will headed by a chairman, who will be an officer of the rank of a retired high court judge, a former chief secretary or a secretary with the central government.

    The board could comprise a maximum five members, a source said. It will have powers to hear disputes regarding property tax levied by municipalities, which will be duty-bound to furnish details on properties and assessments carried out during the fiscal.

    The state administration hopes there will be uniformity and transparency in assessment across urban local bodies using the board's services.

    Disputes over property tax levied on individual properties could also be submitted before the board. The board will also be empowered to notify an urban local body that is found lacking in performance. Officials said after cabinet approval, legislation will be introduced in the state assembly. The government plans to operationalize the reform in the next fiscal.

    The cabinet is also expected to discuss a proposal for extension of time to implement the switchover from the rateable value model of computing property tax to the capital value model.

    It has been necessitated as the Brihanmumbai Municipal Corporation (BMC) is unlikely to effect the switchover by the March 31 deadline. The government may permit the corporation to continue levying provisional bills till then.

     

    MCC unable to recover water bill arrears

    Monday, 28 February 2011 09:29 administrator
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    The Hindu      28.02.2011

    MCC unable to recover water bill arrears

    Staff Correspondent

    Officials hope the PPP model will improve maintenance

    The Mangalore City Corporation's proposal to go for round-the-clock drinking water supply in select wards through public-private-partnership (PPP) on a pilot basis appears to have some justification considering the fact that its water bill collection stands at only 52.64 per cent.

    A note circulated at the press conference of the outgoing Mayor Rajani Dugganna here on Friday said that the water bill demand at the end of January 2011 stood at Rs. 29.37 crore. Of this, the civic body has collected Rs. 15.46 crore. Hence the percentage of bill collection stands at 52.64 per cent, it said.

    An official in the water supply section in the civic body told The Hindu that though its total water bill arrears stood at Rs. 13.91 crore. The corporation was not in a position to recover Rs. 4.14 crore. Hence in reality it could collect Rs. 9.77 crore.

    Regarding Rs. 4.14 crore, the official said the council had passed a resolution to waive off Rs. 2.38 crore bill of Kannur Gram Panchayat and the State Government had decided to waive off Rs. 76 lakh bill of Mangalore Chemicals and Fertilisers Limited (MCF). Of the balance, Rs. 70 lakh bill pertained to those consumers whose water supply connections had been cut off for not paying the bill. The civic body was finding it difficult to recover this amount as owners of many such properties which had those connections had sold them. In addition, Rs. 30 lakh bill belonging to various government offices was in dispute.

    A senior official in-charge of administration at the corporation admitted that there should be an “un-holy alliance” between bill collectors and some consumers. If not how could an amount to the tune of Rs. 70 lakh (part of Rs. 4.14 crore) from consumers remain? he asked.

    The official admitted that introducing round-the-clock water supply was nothing but “partial privatisation” of water supply.

    He said he was hopeful that this would put an end to such “unholy alliances' as the private party in-charge of water supply and bill collection would ensure proper revenue collection. It would put an end to unauthorised connections and uneven distribution of water supply.

    The official hoped that the PPP model would help in proper maintenance of distribution system as water supplier would have to provide quality service for what consumers pay. Otherwise the distributors would be at the receiving end.

    Thumbe vented dam is the main source of drinking water to the city.

    According to the note, there were 71,949 water supply connections in the jurisdiction of the civic body at the end of March, 2010. Of them 66,033 were house connections.

  • Total water bill arrears are estimated to be Rs. 13.91 crore
  • The corporation is not in a position to recover Rs. 4.14 crore
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