System for one-time payment of non-agricultural tax suggested | mumbai | Hindustan Times
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System for one-time payment of non-agricultural tax suggested

mumbai Updated: Sep 03, 2011 02:15 IST
Ketaki Ghoge

The state revenue department is looking at revamping the existing assessment system for non-agricultural tax. In a move that could make charging of NA tax in cities more rational, it is considering a one-time payment for a period of 20 to 30 years, in urban areas. A government order to this effect was issued on August 24.

Many properties in suburban Mumbai are charged NA tax annually. The government has set up a three-member committee, headed by the divisional commissioner of the Konkan region. The other two members are the divisional commissioners of Pune and Nashik regions. The committee will study the possibility of implementing a one-time payment of NA, based on the capital value of land, instead of the current system.

The committee has been given two months to study the issue in detail and give its recommendations.

If the new system is implemented, it could resolve the stand-off between the government and citizens, over the assessment of NA tax. For the last two years, the state has stayed the NA tax applicable in cities, after Mumbai and Pune residents protested against the sudden spurt in tax levied. The tax had jumped by nearly 1,000%.

The new method of assessment is based on a law enacted in Andhra Pradesh in 2006, to ensure that the state did not lose out on revenue as agricultural land in the outskirts of cities like Hyderabad was being used for commercial and residential purposes. The law calls for a one-time fee of 10 per cent of capital value of the land, to be paid for conversion from agricultural to non-agricultural use. The act also allows for a hefty penalty for those who do not pay this tax.