The Hindu 04.02.2010

Property tax revision likely

Special Correspondent

HYDERABAD: The GHMC is getting ready to revise property tax rates for both residential and non-residential buildings from the forthcoming financial year of 2010-2011.

It has sought the government’s nod because of the political implications involved though as a local body the GHMC is empowered to issue a notification straightaway. Citing its weak financial state, removal of 50 per cent hike cap put on non-residential (or commercial buildings) a couple of years ago, when tax rates were enhanced last time, was also urged.

More of rationalisation

Then the government also did not allow any revision of tax for residential properties. There is not going to a straightaway hike but “rationalising” of tax structure with varying rates area wise unlike the present uniform structure, claim senior officials.

They also point out self-assessment of property tax introduced more than a decade ago with a base rate between Re 1 to 40 paisa had “outlived” its purpose. “How long can we have a common tax rate for all areas having different property values,” asked a senior official.

When tax structure was rationalised for commercial properties, the city was divided into 115 main zones and 300-odd minor zones with rates depending on property usage. The city is to be divided into 30-40 zones for residential properties to decide the rates. The calculation of tax is also to be simplified with a fixed rate per square foot of property depending on the proposed new zone.

“This will remove discretionary powers of bill collectors,” explained the official. A draft notification calling for objections and suggestions would be issued before implementing the revised tax rates.

The Times of India 05.02.2010

Only Rs 13.73 crore tax hike approved

TNN, 4 February 2010, 10:24pm IST

SURAT: Bowing to public pressure and demand of its elected representatives, the ruling BJP has decided to reduce the proposed tax hike rate as suggested in the 2010 draft budget, which was recently presented by Surat municipal commissioner.

After a three-day discussion, the standing committee of Surat Municipal Corporation (SMC) has decided to slash the proposed tax hike to nearly 30 per cent of the proposed amount and left the residential category untouched in the election year. Against the proposed increase of Rs 53.19 crore in the draft budget by way of hike in property tax by 11 per cent and 15 per cent in user charges, the standing committee rejected the proposal of Rs 39.36 crore and only approved a raise in tax rates totalling Rs 13.73 crore.

Standing committee chairman Mukesh Dalal said, "We thought the proposed tax hike will not find favour with the common man in the golden jubilee year of the state. We did not want the common man to suffer any hardships due to increase in taxes. Therefore, we have decided to slash the hike proposals by Rs 40 crore."

As per the standing committee's decision, the city will see only Rs 13.73 crore of tax hike during 2010-11. The municipal commissioner in her proposed budget had estimated Rs 256.44 crore from user charges and taxes, including the hike of Rs 53.19 crore. The standing committee has brought that figure down to Rs 216.98 crore by slashing Rs 39.36 crore of proposed taxes.

The amendments have left out all the resident owners from the hike. There is only a marginal increase in non-residential property owners' taxes, reduction in tenant used property tax from the proposed limit and the user charges for non-resident properties have also been slashed.

"We are aware that tax hike is needed, but we can't overlook the problems faced by common people. We have tried our best to balance things with the objective that people of the city don't have to suffer from high taxes," mayor Ranjit Gilitwala said.