BMC delay on new property tax system could cost citizens dear | mumbai | Hindustan Times
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BMC delay on new property tax system could cost citizens dear

Thanks to the 17-month delay in implementation of the new property tax system, you may have to cough up a huge sum as property tax, in some cases even twice or thrice the actual bill amount.

mumbai Updated: Sep 05, 2011 01:10 IST
Sujit Mahamulkar

Thanks to the 17-month delay in implementation of the new property tax system, you may have to cough up a huge sum as property tax, in some cases even twice or thrice the actual bill amount. For, the new capital-based tax schedule will be enforced with retrospective effect from April 2010.

The BMC decided to shift the system of calculating property tax from property’s rateable value to capital value to bring about parity in taxation in January 2010.

According to the Brihanmumbai Municipal Corporation (BMC) officials, lack of political will is the main reason behind the delay in implementation. "Politicians think that the increase in property tax in the island city will burden the voters," said a civic official.

As per the new system, the island city residents will have to pay twice the tax amount they currently pay, while those in the suburbs will pay 15-20% less.

Currently, a sub-committee appointed by the civic standing committee is studying the proposal. According to BMC sources, the sub-committee is expected to drag its feet on the issue until December, when the code of conduct for the February 2012 elections would be enforced.

Denying any politics behind the delay, Rahul Shewale, chairman, civic standing committee, said: "Sub-committee will study the new system thoroughly and suggest some changes if required."

Property tax is the BMC’s second largest source of income after octroi collection. Currently, the civic body recovers the property tax bi-annually.

Since the new system is yet to get the final nod, the BMC has issued provisional bills on the basis of the old tax system. As on August 31, the civic body was able to recover only Rs 450 crore while it should have, under the new system, recovered over Rs 1,500 crore.

Around Rs 1,000 crore behind its estimates, the amount will be recovered as outstanding bills later. This year, BMC is expected to get an annual revenue of about Rs3,500 crore from the property tax.

SS Shinde, joint municipal commissioner, said, "I have no idea about the exact amount collected, but it is nearly Rs 450 crore. Once the new system will come into force, we will adjust the dues in the coming bills.

A civic official said that there was no reason for the panel to veto the draft. "Owing to the cap, the tax will not be increased by more than double," he said.