East Delhi Municipal Corporation budget: 3 new taxes proposed to hike revenue

The total budget projection of the East corporation for the financial year 2021-22 is ₹4,647 crore. With the proposed new taxes, the civic body aims to boost its revenue by ₹50 crore annually.

In a bid to overcome its acute financial crisis, the East Delhi Municipal Corporation (EDMC) has proposed three new taxes—professional tax, betterment tax and education cess—in its budget proposal for the financial year 2021-22 presented on Wednesday.

An East Delhi Municipal Corporation (EMCD) worker sprays disinfectant. (Raj K Raj/ Hindustan Times)

The total budget projection of the East corporation for the financial year 2021-22 is ₹4,647 crore. With the proposed new taxes, the civic body aims to boost its revenue by ₹50 crore annually.

“Due to the Covid-19 pandemic, the property tax collection has been hit. The corporation is facing a dual challenge of increased responsibilities in terms of providing services with limited resources to do so. So, we propose three new taxes that will together help boost the corporation’s revenue by around ₹50 crore,” additional commissioner Alka R Sharma said in her budget presentation for the financial year 20201-22. She was presenting the budget proposal on behalf of municipal commissioner Dilraj Kaur, who is infected with Covid-19.

According to civic officials, this new tax would be levied on self-employed professionals such as doctors, lawyers, chartered accountants, architects, those working in private firms, etc. for using civic amenities.

The corporation also proposed an education cess of 5% on annual property tax. “Levying of this tax is estimated to generate ₹10 crore a year,” said Sharma.

She added that betterment tax is proposed at 15% of annual property tax. “The tax will be levied against properties, the values of which have constantly seen a rise because of public infrastructure development works. This is estimated to fetch the civic body ₹30 crore annually,” she said.

The three taxes were proposed in the previous year’s budget as well, but were not approved by the House.

Other than this, the corporation has also proposed hiking the transfer duty (for change in the name of properties) by 1%. This tax is levied by the corporation on the transfer of immovable properties situated in its area of jurisdiction. Currently, transfer duty is 3% for male buyers and 2% for female buyers.

“This year, the property tax collected till November 30 was ₹150 crore, as against ₹209 crore in 2019-20,” said an EDMC official requesting anonymity.

However, EDMC mayor Nirmal Jain said that the new tax proposals may not be approved. “We will have to thoroughly examine the new tax proposals. We don’t want to put additional burden on the people during the pandemic,” said Jain.

Manoj Tyagi, AAP councillor and leader of the opposition, EDMC, said that the budget is not people-friendly.

“We are not in favour of levying new taxes at a time when the economy is slow. The budget has nothing new to offer to boost revenue.”