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Commercial property owners face up to 300% hike in tax

delhi Updated: May 07, 2016 20:27 IST
Vibha Sharma
Vibha Sharma
Hindustan Times
Property Tax

A senior SDMC official said the move is likely to increase the agency’s revenue collection by 150 crore during the financial year 2016-17.(S Burmaula/ HT Photos)

Owners of commercial properties in south Delhi will shell out more in property taxes as the South Delhi Municipal Corporation (SDMC) is set to give a go-ahead to the recommendations of the Third Municipal Valuation Committee (MVC). The panel has recommended recategorisation of industrial units, hotels (three stars and above), airport and other business establishments. This restructuring will lead to a two- to four-fold increase in property tax. Sources in the SDMC said the MVC report will be presented in next House meeting (May 26 tentatively) for final approval.

If the recommendations are implemented, the new tax policy would be applicable retrospectively from April 1. The report also suggests changes in ‘factor’ (quotient given on type and usage of property). The report has already been approved by the high power property tax committee of SDMC and forwarded to the Standing Committee which deals with financial matters.

A senior SDMC official said the move is likely to increase the agency’s revenue collection by 150 crore during the financial year 2016-17. “For example, the industrial areas in south Delhi, which presently fall under category G, will be moved to Category B. Similarly, the factor use of the barat ghars and banquet halls will increase from 4 to 6. Property tax is calculated as rates per square meter (sqm) — defined for different categories — multiplied by factor,” said Ram Mohan Singh, SDMC assessor and collector.

The MVC report had been pending for approval for over five years. It was submitted to the municipal corporation in 2011 by Municipal Valuation Committee (a five-member committee) constituted by the Delhi government. “The report aims to increase revenue through improved property tax coverage and bring left-out properties under the property tax net. The other two corporations, North and East Delhi MCD, have already implemented the MVC report,” said Subhash Arya, SDMC leader of house. According to him, the report has already been given anticipatory approval by the former mayor and standing committee chairman.


The civic agency collects property tax based on per unit area, which is based on the provisions laid in the first MVC. The second MVC report was rejected by the civic body in the year 2007.

Besides commercial property taxpayers, SDMC is working to implement methods to bring more residential taxpayers under the ambit of property tax net. This includes conducting door-to-door surveys to identify defaulters, giving unique IDs to taxpayers and preparing a database of property tax payers.

“Currently, we don’t have any record of taxpayers and rely on the data provided by BSES and other utilities. However, many times the data can be misleading, as these are not updated,” said Mukesh Yadav, SDMC spokesperson. To rectify information, the department has planned to outsource the task of collecting data of taxpayers to a private company.

“We will deploy an SDMC inspector and two staff (from the company) to cover each ward. They will tentatively cover 100 houses per day and about 2,500 houses in one month (25 working days). Through this process, we expect to collect data from all 104 wards in four months,” said Singh.

The SDMC also plans to provide e-passbooks to taxpayers, along with unique identification cards. The e-passbooks will have an online record of all the transactions made by the taxpayers.