The Hindu 19.01.2010

MCD proposes increase in property tax rates

Staff Reporter

NEW DELHI: The Standing Committee of the Municipal Corporation of Delhi proposed some modifications in the existing rates of property tax and mooted several new taxes and surcharges at its meeting here on Monday.

The meeting was organised for finalisation of the revised MCD budget estimate for 2009-10 and budget estimates for 2010-11 as proposed by the Municipal Commissioner in the Standing Committee this past December. While the Commissioner had proposed introduction of a new “professional tax” on doctors, lawyers, government officials and businessmen, the Standing Committee resolved not to implement it.

Standing Committee chairman Ram Kishan Singhal said: “We will not be introducing the professional tax proposal and instead of a flat 5 per cent increase in the rate of property tax across all categories of properties we have now proposed an increase of between 1 per cent and 3 per cent in residential properties which would be applicable depending on which category the property falls under. Other surcharges have also been announced to raise the revenue of the civic body and reduce the financial burden owing to the Sixth Pay Commission.”

“The properties of the Delhi Jal Board and the private power distribution companies would also be considered as commercial properties for calculation of property tax as these organisations are charging commercial rates on their services being provided to the MCD,” he added.

The MCD has divided properties into eight categories from A to H depending on the area. For residential properties, the proposed hike is from 10 per cent to 13 per cent for category A and B, from 10 per cent to 12 per cent for category C, D and E and from 6 per cent to 7 per cent for category F, G and H.

For non-residential properties, the proposed hike is from 10 per cent to 15 per cent for category A and B, from 10 per cent to 13 per cent for category C, D and E and from 10 per cent to 12 per cent for category F, G and H.

Tax is proposed to be raised from 10 per cent to 15 per cent for farmhouses used for residential purpose and from 15 per cent to 20 per cent for the non-residential ones.

Public school buildings, pre-schools and nursery schools would have to pay 12 per cent tax in place of 10 per cent at present. But all aided schools will be provided with a rebate of 90 per cent of the total property tax payable if the payment is made in a lump sum in one instalment during the first quarter of the year (April-June) clearing all arrears.

“An electricity tax at the rate of five per cent of the total consumption would also be charged from the power distribution companies supplying power in Delhi,” Mr. Singhal said.

He also proposed that suitable annual rent for use of municipal land be recovered from companies that install equipment on municipal land and be credited to the municipal fund. A committee would be constituted for recommending the rates and manner of its collection, he added.

Other proposals to raise revenue include levying of sanitation charges at the rate of Rs.5,000 per month per for booking of banquet halls and farmhouses for hosting marriage or other functions. According to the proposal, such halls would also have to pay an annual registration fee ranging between Rs.20,000 to Rs.1 lakh depending on their respective capacities other than the sanitation charge.

The chairman also announced plans to charge a licence fee at the rate of Rs.100 per head of cattle entering the MCD area from neighbouring States after being brought in vehicles. “This may be collected by the agency collecting toll tax against collection charges as may be decided by the Commissioner, and credited to the municipal fund.”

If and when these proposals are ratified at the MCD House meeting next week, they would come into effect from the beginning of the upcoming new financial year beginning April 1.

Indian Express 18.01.2010

Property tax: Ahmedabad Municipal Corporation extends interest rebate scheme till March, 2010

The interest rebate scheme on property tax dues has been extended till the end of the current financial year following an urgent resolution, which the civic standing committee passed in its previous meeting. The scheme introduced in mid-November last year had come to an end on January 13. The decision was taken in the committee meeting chaired by Krushnavadan Brahmbhatt (Koko) in the absence of chairman Asit Vora, who is currently in the US.

The municipal corporation waives 100 per cent penal interest on property tax (in case of chawls and slums) and 50 per cent (in case of other properties) dues under old and new tax formula. The concession is allowed only when the tax due under the new formula is more than the old system.

The rebate scheme is offered every year mainly to circumvent the situation arising out of indifference of the state government towards long pending plea of the AMC to reduce penal interest from 18 per cent to eight per cent. This was a major electoral promise the ruling BJP had made during the 2005 civic elections.

As a way out, the AMC has come up with the idea of rebate but this routine of many years has encouraged defaulters, who instead of paying up, wait for rebate announcement. Those who pay irrespective of the offer out of a sense of responsibility, feel paying for their punctuality. This is one reason that tax recovery in “normal days” reduces to trickle, and this gives AMC officials and elected wing to pat own back for record collections during rebate period. In the last three months of rebate period, against the rebate amount of Rs 8 crore, the civic body has collected Rs 90 crore towards tax bills: almost Rs 1 crore a day, officials say.