In a move that is likely to provide relief to taxpayers, Municipal Corporation of Gurugram (MCG) has decided that basements established as common facility in group housing complexes, and are meant exclusively for parking, will be exempt from property tax.
Reiterating the Central government’s notification of 2013 that basements used exclusively for parking are exempt from property tax, the MCG decided to implement the same.
MCG officials said the notification of the Central government on October 11, 2013, lays down the property tax chargeable from properties based on their classifications.
In paragraph 2(A) under clause (a) titled “Property Tax on Other Floors”, the notification states that basements that are used exclusively for parking are exempt from property tax.
However, under clause (b) titled “Flats”, specifying applicable property tax rates per square feet based on carpet area of flat, there is no mention of whether basements exclusively used for parking would be assessed or be exempt from property tax. Therefore, in the absence of any specific mention, some MCG officials are assessing basements in residential group housing flats to the property tax.
After carefully assessing the notification, MCG officials consented that in paragraph 2(A) under clause (b), there is a note to the said clause which states that tax for common facilities or buildings shall be calculated as per area under different usage.
This provision requires that if a particular portion of common facilities is used, for example, as a residential space for a security guard, then it would be classified as residential for the purposes of levy of property tax.
If some portion is used as a clubhouse, then it would be charged in the category of clubhouse. By the same token, if the basement is exclusively used for parking, then it stands to reason that such basement parking would be exempt from the levy of property tax.
“After assessing the notification, zonal taxation officers have been directed to immediately identify and review assessed properties and exempt taxpayers who use basements for parking from the levy of property tax. They have also been directed to issue revised property tax bills,” SS Rohilla, spokesperson of MCG, said.