PMC’s planned crackdown on property owners who misused tax exemption clause will also help it regain revenue

The Pune Municipal Corporation (PMC) has decided to crack the whip on property owners who have been misusing the 40 per cent exemption which is meant for those residing

The Pune Municipal Corporation (PMC) has decided to crack the whip on property owners who have been misusing the 40 per cent exemption which is meant for those residing in their own houses. A committee formed to increase revenue for the civic body found that people were using the property for commercial purposes, including renting out the property or using it to run a small business, and were also reaping benefits of the tax exemption.

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According to PMC Commissioner Shekhar Gaikwad the civic body is in the process of updating its record and softwares to collect tax without exemption from those using their properties to earn revenue. Those living in residential-owned apartments are eligible for 40 per cent tax exemption, but are not legally allowed to use their properties for commercial use, which includes giving the property on rent/lease basis.

“There are administrative errors (which happened in the past) and thats why we were not able to collect the rightful tax from those who were using this exemption when it was not applicable to them. Also, the PMC will now have to update its software so as to ensure that such commercially-used properties are being charged the rightful property tax,” said Gaikwad.

Additional commissioner Rubal Aggarwal, who heads the PMC property tax department, said that while the rule to charge property tax without exemption from those using premises for commercial purpose already exists, there was an issue at the implementation level. “This is not a new thing, but we are in the process to ensure that from now on, the implementation is done in a proper manner,” said Aggarwal.

While the administration has given an in-principal approval to draft the new property tax bills along with the additional charges against misused exemption, the proposal needs a go ahead from the elected members.

Gaikwad said, “It also needs to be ensured that the exemption is relaxed only for the duration till the property is used for commercial uses. We will also decide on rectifying the bills for the past five years, but we need approval from the standing committee and the general body to send in rectified bills in the upcoming property tax bills.”

The PMC will send out property tax bills from April for the upcoming financial year. “We do not want the marginalised section which uses the homes for a small business like a shop or a beauty parlour to be exploited because of this and so, we are yet to take any stern decision on it,” the PMC chief Gaikwad added.