The UT administration has written a letter to the municipal corporation, directing it to impose house tax on the pattern of property tax. This could lead to residents being forced to pay much more tax (around 10 times) than they are paying at present as it would increase from Rs 1 per square yard to Rs 10 per square yard.
Interestingly, the file on the issue has been lying with the administration for more than eight months.
The civic body, on its part, has decided to place the letter in the House on September 25 and take a call.
As things stand now, the MC is charging house tax at the rate of `1 per square yard for houses covering an area of 125 square yards or more.
THE ISSUE COULD LEAD TO A STAND-OFF
Sources said the administration wants the MC to follow the letter and increase the tax, something many councillors have been against for some time. The sources also added that if the MC failed to toe the line, the UT administration under Subsection (9) of Section 90, Municipal Corporation Act, would impose the same.
UT joint secretary, home, MM Sabharwal, said: “We have written a letter to MC, asking it to impose house tax in accordance with the Punjab Municipal Corporation Act, 1976, extended to the UT. The rates MC has imposed are low in comparison to all progressive cities.”
COUNCILLORS UP IN ARMS
Councillors, however, have maintained that they will not allow an increase in house tax at any cost. BJP councillor Satinder Singh said: “We knew this will happen, but will not allow an increase in the house tax. We will lodge a strong protest if the administration moves in this direction.”
BJP councillor and deputy mayor Davesh Moudgil said: “We will oppose the proposal and will not let it pass in the House. In case, the administration tries to impose the levy, protests will be held.”
THE BACKGROUND AND EXEMPTIONS
In July, 2013, the notification for charging house tax was issued and the administration had urged the MC to revise the tax within three months of the notification.
However, the MC sent the revised proposal at the same rate as that charged last year to the UT administration.
The administration had exempted houses having plot area less than 125 square yards, economical weaker section, low-income groups category and houses in villages falling within the limits of the MC from paying the tax.
THE NEW PROPOSAL
At present, the MC is charging between `10 and `20 as property tax, depending upon the sector, as the city is divided into four zones. If house tax is charged on this pattern, the levy will rise proportionately.
The method of assessment of property tax (also the house tax) is provided under Section 93 of the Municipal Corporation Act, 1976. The property is assessed to tax based on its annual rateable value. Under Section 93 (a), this is the gross annual rent which the building or land may reasonably be expected to get.