Come April 1, the Punjab government for the first time would start imposing property tax on residential and commercial establishments falling even in small bastis or slums, besides swanky malls and hotels.
The tax, which is to be collected on quarterly basis, would help mop up a few hundred crores every year. However, even though the government may claim the levy won't be calculated in any "arbitrary" manner, it is still the prerogative of district-level committees to fix property rates on the basis of which the tax would be determined.
As per the bill, respective civic bodies and district administrations are working out annual unit values -- 5% of unit value per annum would be imposed as tax on the residential buildings, the rate for malls and 5-and-above-star hotels is 25%, while 15% of total unit value would be imposed as tax on all other properties.
As per the Punjab Municipal (Second Amendment) Bill 2012, which brought in the tax by tweaking the Punjab Municipal Act 1911, a town would be divided into eight zones depending on the degree of civic amenities. "The formula hence worked out would be transparent, and a property owner can then calculate the tax on his own," said principal secretary, local bodies, Jagpal Singh Sandhu.
The committees to decide the zoning would comprise the regional deputy director of the local bodies department, the MP, MLA of the constituency in which the town or city falls; executive officer, president and vice-president of the civic body; and a nominee of the deputy commissioner not below the rank of tehsildar. A committee of the DC, MP, MLA, president of the local body and the executive officer would evaluate the unit value, which would be re-assessed every five years. Sandhu said the process has started across the state.
Apart from the zoning, the age of the built-up property would also be a deciding factor for fixing unit value - bracketed as per age up to 10 years, 10-20 years and so on, the older the property the lesser its unit value. Also, the value would be linked to the actual built-up area - the more the built-up area the more the tax.
On small dwelling units, the tax is fixed - for area up to 50 square metres, it is Rs. 50 per annum, while those between 51 and 100 square metres would attract a tax of Rs. 150 per annum
Buildings and land used for religious purposes, cremation grounds, burial grounds, gaushalas and stray animal care centres are exempted from the tax. Historical and heritage buildings -- declared as such by the state or central government or UNESCO -- are also exempted.
Fixed tax on small dwelling units
Up to 50 square metres: R50 per annum
51-100 square metres: R150 per annum
Exempted: Buildings and land for religious purposes, cremation, burial, gaushalas, other stray animal care centres, and also historical and heritage buildings