The Hindu 10.03.2011
Tax hike for residential properties unlikely
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.
