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NDMC puts unit area method in cold storage

By Sandeep Joshi

NEW DELHI, MARCH 9. While the Municipal Corporation of Delhi is preparing to implement the unit area method of property tax in the Capital from April 1, the New Delhi Municipal Council (NDMC) has shelved all its plans to follow suit in Lutyens' Delhi. It wants to play safe and adopt a wait-and-watch policy till things settle down in the MCD area.

"The concentration of buildings and commercial properties is higher in MCD area compared to NDMC area, so we will wait for at least a year to find out how the new system works for the Corporation. If their revenue collection improves, we might also implement it," says the NDMC spokesperson, Madan Thapliyal. Significantly, there are around 12,000 properties in the Council area spread in over 40 sq. km from which over Rs.120 crores is generated from it annually.

Another reason why the NDMC is not keen on implementing the new method of property tax collection, that was recently given a go ahead by the MCD House as well its Standing Committee, is that they fear that some PILs (Public Interest Litigations) might be filed against the new scheme stalling the entire process. "There is no point in hurrying with the implementation. We will also introduce it in our area only after it is implemented smoothly in the MCD area. Till then we will continue with our existing system of property tax collection," informed Mr. Thapliyal.

The NDMC charges tax as per the rateable value of properties that is adjudged and re-valued every year keeping in mind various aspects governing the value of property in a particular area. Last year, it even introduced a new slab of property tax for the benefit of those owning residential properties. These properties, of which 80 to 90 per cent are commercial, are located in and around Connaught Place besides some in residential colonies like Diplomatic Enclave, Golf Links, Babar Road and Jor Bagh, and around two dozen luxury and other hotels.

The number of residential and commercial properties was huge in MCD area as compared to NDMC area, so any change in the revenue collection for the Corporation was also likely to be great. Moreover, the number of properties being added to the MCD list was also big as compared to the NDMC. So both the civic bodies could not be compared on these grounds, he said.

"In our area, tax collection normally sees some hike every year due to increase in value of property, particularly commercial. But the new system of unit area method advocates no change or revision of property tax for three years. This might not affect the Corporation, but keeping in mind the regular escalation in property prices as well as hike in rents, the Council might end up losing. So we have to study every aspect of the new mechanism before taking any decision. Once we have some data by the end of next financial year, then only we can decide on it," he added.

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