Delhi’s east civic body commissioner proposes 2-3% property tax hike

With the Delhi municipal elections slated to be held early next year, the latest proposals have a very slim chance of being cleared by the BJP-led house, civic body sources said. In the past, too, no new tax hike was approved by the house

While presenting budgetary proposals worth ₹4,735 crore for financial year 2022-23, the East Delhi Municipal Corporation (EDMC) commissioner Vikas Anand has proposed a 2-3% hike in property tax on residential properties, apart from a bouquet of tax hikes and a couple of new taxes thrown in — all for improving the financial health of the cash strapped civic body.

In a bid to increase the internal revenue from taxes and fee, the commissioner has proposed to increase property tax rates in categories C,D, and E colonies from 11% to 13% and for categories F,G, and H from 7% to 10%. (Getty Images/iStockphoto)

Anand also pushed to hike the theatre tax and the fee on sanctioning new building plans, apart from an additional 5% education cess, and two new discretionary taxes— the betterment tax and professional tax.

With the Delhi municipal elections slated to be held early next year, the latest proposals have a very slim chance of being cleared by the BJP-led house, civic body sources said. In the past, too, no new tax hike was approved by the house.

Anand said the EDMC is going through a financial crisis and the Covid-19 pandemic has made the situation worse. “We have tried to present a balanced budget keeping the needs of everyone in mind,” he said.

In a bid to increase the internal revenue from taxes and fee, the commissioner has proposed to increase property tax rates in categories C,D, and E colonies from 11% to 13% and for categories F,G, and H from 7% to 10%.

The colonies in the city are categorised from A to G based on infrastructure and amenities, with Category A being the most developed and Category G the least.

An EDMC official said east Delhi has no colonies under categories A or B. Similarly, in case of non-residential colonies, a tax hike of 3% for categories C,D and E, and 2% for categories F,G,and H has been proposed. A 5% property tax rate hike has been moved for residential government properties.

Anand also proposed to increase the theatre tax from ₹10 per show to ₹1,000 per show in Class-1 cinema theatres and from ₹7 per show to ₹1,000 per show in Class-2 theatres. “The cost of a single ticket in many theatres is so high that ₹1000 for all the tickets combined (in a single show) should not be a problem,” he said.

The EDMC also plans to increase the fee for building plan sanction from ₹5 per square metre (sqm) to ₹50 per sqm in the case of properties that have an area less than 50 sqm, and from ₹10 to ₹100 per sqm for plots above 50sqm.

The civic body will not levy some of the existing taxes — such as that on animal ( oxen or buffalo) drawn vehicles. Anand said these taxes do not appear “very appropriate” with the changing times.

At the same time, three new taxes have been proposed. An education cess of 5% of tax value, a betterment tax at 15% of property tax value and professional tax between ₹1,200 and ₹2,500 a year has been proposed on businessmen, accountants, advocates etc, who earn more than ₹5 lakh per annum.

A senior EDMC official said professional tax is levied in all the major metropolitan cities. “The earnings from education cess will only be used for the education sector,” official said, asking not to be named.

The official said the betterment tax is levied on properties, the values of which have seen a rise because of public infrastructure development works such as flyovers, better roads etc. EDMC hopes to collect ₹42 crore in 2022-23 by introducing this tax.

The EDMC has also decided to open a waste-to-art theme park in Nirman Vihar. Most of the new projects will be carried out on public private partnership (PPP) model and a dedicated cell has been set up for the purpose. “The cell will start working on several remunerative projects soon,” Anand announced.

The immediate projects being planned include multilevel parking at eight sites, maintenance of 15% parks, opening of eight nurseries and outsourcing of open gyms. The EDMC also plans to give a 25% subsidy to bulk waste generators on setting up at-source processing facility.

East Delhi mayor Shyam Sunder Aggarwal said no new taxes will be imposed on people. “We don’t want to increase the burden on public during the pandemic. We will try to increase the tax net by focusing on people who are not paying taxes or taking trade licences for the commercial establishments,” he said.

The leader of the opposition and AAP councillor Manoj Tyagi said they will oppose any tax hike. “They should increase the collection instead of increasing taxes. This budget is against low income groups, while the corporation has provided rebates to contractors during the pandemic,” he said.