The Punjab cabinet on Tuesday gave its approval to rationalise property tax in urban areas on the recommendations of local bodies minister Anil Joshi.
The SAD-BJP government’s move comes in the wake of the BJP’s objection to the ‘hefty’ property tax under the previous policy.
The government would amend the Punjab Municipal Act 1911 and Punjab Municipal Corporation Act 1976 to give relief to property owners.
Major points of the rationalisation move:
De-linked: Property tax collection delinked from collector rates
Exempted: Religious places, cremation grounds, cattle pounds, historical buildings, old-age homes, orphanages, buildings, and land belonging to municipalities, government and government-aided schools and colleges, government hospitals and dispensaries, parking lots (in multi-storeyed flats) and land under agriculture and horticulture use. Vacant plots and houses constructed on plots measuring 50 square yards (irrespective of number of storeys), single-storeyed residential houses up to 125 square yards and flats up to 500 sq ft super covered area; freedom fighters, BPL (below poverty line) families, ex-servicemen; Newly created nagar panchayats or created before April 1, 2014, or have not completed three years up to April 1, 2014, and new regions included in municipalities would be exempted for a period of three years.
50% exemption: All educational institutions
Rs 5,000 annual exemption: Widows, disabled
7.5%: Tax on total annual rent of non-residential commercial buildings.
The municipalities have been divided into three categories: A, B and C. Category A would have three sectors and categories B and C would be divided into two sectors each. The property tax rates are generally the highest in Category A.
Category A: Amritsar, Jalandhar, Ludhiana, Patiala and SAS Nagar
Category B: Bathinda, Phagwara, Moga, Pathankot, Hoshiarpur, Gurdaspur, Batala, Kapurthala, Khanna, Jagraon, Nangal, Rajpura, Nabha, Mandi Gobindgarh, Sangrur, Malerkotla, Sunam, Barnala, Kharar, Zirakpur, Mansa, Dera Bassi, Muktsar, Malout, Ferozepur, Abohar, Fazilka, Faridkot, Kotkapura
Category C: All remaining municipalities of Punjab
Annual property tax rates (Rs per square yard)
Tax applicable on houses above 125 sq yards and flats more than 500 sq-yard area. Over and above 50% of the rates applicable for basements, first floor, and each floor above that and open space of the plotted houses
50 paise to Re 1
Up to 100 sq yards
101 to 1,000 sq yards
Above 1,000 sq yards
Multiplexes and shopping malls
Category A Rs 15
Category B Rs 10
Category C Rs 8
Category A Rs 6
Category B Rs 4
Category C Rs 2
Hotels/motels: up to 5 rooms with 2-star rating/without rating
Hotels/motels: Up to 16 rooms and above rooms with with/without rating
Category A Rs 7-9
Category B Rs 6-8
Category C Rs 5-7
Manufacturing unit, education institutions and storage godowns
Up to 4,000 sq yards
Category A Rs 5
Category B Rs 4
Category C Rs 3
Above 4,000 sq yard
Category A Rs 7.5
Category B Rs 6
Category C Rs 4
The rates are applicable for ground floor, basement and other stories each to attract 50% of the applicable rate