After expressing concern over the declining property tax revenue after advent of the Unit Area Method (UAM) of house tax, the MCD's Standing Committee on Wednesday cleared a proposal to exempt all residential units in rural and urban villages from paying house tax.
Clearing the proposal, Standing Committee chairman JK Sharma said that if the MCD's Assessment and Collection Department has sent any notices to residents staying in these villages, then they should be withdrawn with immediate effect.
The tax exemption proposal has not been extended to farmhouses and factories on village land.
The proposal, if cleared by the Centre (as it requires an amendment to the Delhi Municipal Corporation Act), would benefit residents staying in Shapur Jat, Khirki Extension, Neb Sarai, Ber Sarai, Sultanpur and similar settlements.
However, a similar proposal by the MCD to give tax exemption to residential units on village land of up to 200 square meters in size was turned down by the Delhi government.
The BJP dismissed the proposal as a political stunt by the Congress-led MCD to gain votes of the rural belt.
On Wednesday, the Standing Committee did away with the 200 square metre clause and proposed that all residential units in the villages, irrespective of their size, should be exempted from paying house tax.
"The proposal is not restricted to owners of ancestral property in villages alone, but also to those who have bought the houses from villagers. Even residential units in villages that have been put on rent are proposed to be exempted," said Sharma.
The committee, however, expressed concern over the declining tax collection and the failure of the MCD to meet its annual Rs 1200 crore target.
"While adopting the unit area method, the MCD's tax base would be widened and the number of taxable properties would rise from 9.5 lakh to 25 lakh, but this has not happened. The department should fix monthly targets for its inspectors and give them incentives of 2-3 per cent from the tax collection on meeting these targets," said councillor Sanjay Puri.