Property tax regulations to be discussed in legislatureProperty tax laws which may equalize the tax payable in the city as well as the suburbs may be tabled in the Legislature in the coming week.
21 Jul 2008
Property tax laws which may equalise the tax payable in the city as well as the suburbs may be tabled in the Legislature in the coming week.The proposed regulation is based on the capital value-based system, instead of the rateable value-based system which was introduced in 1888 by the BMC Act, wherein the tax calculation was based on the rent.
The proposal was initiated based on a study conducted by the Tata Institute for Social Sciences (TISS) and the University of Mumbai. According to estimates by TISS, the proposed system could improve the tax collection by up to 200 per cent.
A draft for the proposed system is ready and will be discussed in the House soon. The joint select committee has made some suggestions in the draft which includes a tax calculation system, fine collection, percentage of tax, among other aspects.
Reportedly, the joint select committee has already approved the capital-based system while exempting flats below 500 sq ft from any property tax hike.
The committee suggested exemption of flats below 500 sq ft under the capital value-based system and put in a provision to revise tax for these flats in five years.
The general tax levied yearly would be 0.1-1 per cent of the capital value. The BMC's general body will calculate the exact tax payable by individual each flat owners.
An important provision of the bill is that the deadline for the payment of property tax has been increased from 15 days to three months. Also, the penalty has been reduced from 20 per cent to 2 per cent.