Karnataka - Bangalore   

Paying guests: hosts may be taxed

By Afshan Yasmeen

BANGALORE, AUG. 8. It's Jogupalya Main Channel Road: A landlord here has over 25 paying guests (PG). Each gets a cot and there is a toilet for common use. Rent about Rs. 6,000 per head. With food, the PG pays Rs. 2,000 extra. On Jogupalya 9th Street, 15 PGs live in one house. Indiranagar 6th Main, over 30 PGs live in one house.

The landlord charges them Rs. 5,000 to Rs. 8,000. When students and professionals are ready to pay such amounts for what they consider "decent" accommodation, the house owners in the city are increasingly looking at PGs as a secondary source of income.

And this money is not taxed because most landlords, especially the older ones, let out their homes or rooms in the name of "security". That is why the Bangalore Mahanagara Palike (BMP) is studying a proposal to impose an additional tax on such owners. A rough estimate shows that three out of every 10 houses in a locality have paying guests. Bangalore's attraction lies in the number of educational institutions it has and the job opportunities available.

The PG accommodation is big business. "Although the owners charge hefty amounts from their guests, they pay no tax to the BMP," is the civic body's grouse.

Trade licence

The BMP wants to include this business in the list of 74 trades that come under the new trade licence scheme. As it had not tried to find out how many such PGs were there earlier, the BMP revenue officials will soon survey houses. K. Jothiramalingam, BMP Commissioner, said the BMP would find out if kitchens in houses with many PGs had commercial LPG cylinders "that might pose a danger to human life." He said they were looking at the legal aspects of imposing an extra tax.

Kitchen or a hotel?

The Mayor, P.R. Ramesh, said it was understandable if senior citizens wanted one or two PGs. "But if a small house has turned into a hostel, the BMP can levy commercial property tax on the owner," he said.

Besides, if the kitchen was big enough to be called a mess or a hotel, the owners needed trade licences from the Health Department of the BMP, he said.

Recently, the Jogupalya corporator, B.M. Mangala, raised the matter at the BMP Council meeting. She wanted the BMP to include the "PG accommodation business" in the trade licence scheme and slap commercial rates on the owners.

But the proposal has not gone down well with the owners who host PGs. M. Kushalappa, a retired Government official (with PGs) in Prashanthnagar, said: "It is a ridiculous idea, and the revenue from the sector will be negligible. Instead of taxing us extra, why can't the BMP streamline its administration and check misappropriation of funds?"

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