MCD’s property tax mop up in Delhi hits ₹1,100crore in first quarter

Delhi mayor Shelly Oberoi said that the property tax collection till June 30 was ₹1,113 crore as compared to ₹695 crore in 2022.

The Municipal Corporation of Delhi (MCD) has witnessed a massive spike in property tax deposits with a collection of ₹1,113 crore in the first quarter of the 2023-24 fiscal — a jump of more than ₹400 crore over the corresponding period in last year.

The number of taxpayers from April to June 2022 was 627,000 and the corresponding number in 2021 was 456,000. (HT Archive)

The new Aam Aadmi Party (AAP) administration credited the 60% jump to its “honest politics” even as the opposition Bharatiya Janata Party attributed the jump to an increased burden on taxpayers due to a reduction in rebate rates, the non-extension of the rebate period, and changes in taxes in certain categories.

“After AAP formed the government in MCD, people themselves have started paying tax properly. They know that now there is an honest government and every penny they pay will be spent on development. Earlier, during the time of the BJP, people did not pay taxes because they thought that the tax they paid got stolen,” chief minister Arvind Kejriwal tweeted in Hindi on Monday.

Delhi mayor Shelly Oberoi, in a press conference at the Civic Centre, said that the property tax collection till June 30 was ₹1,113 crore as compared to ₹695 crore in 2022 and ₹540 crore in 2021.

“The number of taxpayers has gone up to 7.17 lakh (717,000) which reflects the confidence in an honest AAP government. Earlier, public money was wasted in corruption and MCD was run at a loss. People did not get any benefits,” she said.

The number of taxpayers from April to June 2022 was 627,000 and the corresponding number in 2021 was 456,000.

Oberoi said that the increased collection will be used to fulfil the AAP’s promises by deploying increased revenue in better public services, roads, flyovers, health, education and landfill management.

In another press conference, AAP’s MCD in-charge and Rajinder Nagar MLA Durgesh Pathak said that the increase in tax collection showed the public’s trust.

“The corruption that defined the MCD during previous tenures had left the citizens of Delhi sceptical. There has been a lack of enthusiasm among citizens as they were worried about the corruption in the utilisation of those funds by the politicians. We are committed towards eradicating the corruption in MCD and aiming at bringing it to operate profitably within the next 3-4 years,” he said.

Property tax collection remains one of the biggest sources of revenue for the cash-strapped civic body.

Under the budget projections for 2023-24, MCD plans to earn ₹15,523.9 crore, out of which ₹4,300 crore is expected to be collected via property taxes alone. Other sources of tax revenue include electricity tax, transfer duty on properties, toll tax, and tax on advertisements.

The three erstwhile municipal corporations of Delhi were reeling under a severe financial crisis, which led to delays in payment of salaries and regular strikes by employee unions.

The three civic bodies were reunified into the Municipal Corporation of Delhi in May last year.

A senior municipal official said that MCD provides an incentive of 10% rebate in property tax for early filing in its first quarter, and an additional 2% rebate is provided on online payments.

“The property tax department has been registering a rise in collections over the last three years. This has been facilitated through improvements in deposit process, online notices as well as amnesty schemes designed to increase the number to tax payers,” the official added, asking not to be named.

However, the civic body continues to face a problem in the payment of salaries and pensions. MCD has about 147,000 employees and over 50,000 pensioners. The combined salary-pension bill of the corporation each month is ₹774.8 crore.

Leader of Opposition in the MCD House and former mayor Raja Iqbal Singh said that the AAP’s statements were misleading.

“They have said that the AAP-ruled MCD has achieved the increased revenue but it is a result of raising the property tax collection factors, decreasing the rebate from 15% to 10%, and putting undue pressure on trading association and RWAs. AAP is burdening the citizens with additional tax. Earlier, 15% rebate was given on depositing advance property tax, but after assuming charge in corporation, Aam Aadmi Party has reduced it to 10%. The 1% education cess was increased on property tax,” Iqbal said.