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NDMC shies away from Unit Area Method

By Our Staff Reporter

NEW DELHI, FEB. 15. Keeping in mind the difficulties experienced by the Municipal Corporation of Delhi (MCD) difficulty in meeting the targets set for collection of property tax under the new Unit Area Method regime, the New Delhi Municipal Council (NDMC) has adopted a "cautious approach'' and decided not to go in for the new tax structure from the next financial year.

"The new regime will be implemented in Lutyens' Delhi only after studying MCD's experiences and the changes it has been adopting in the new regime, and then the civic body will formulate its own tax structure and make necessary changes in the regime to suit its requirements," said the NDMC Chairperson, Sindhushree Khullar. Stating that in the NDMC area almost 80 per cent of the properties were government buildings on which property tax could not be levied, Ms. Khullar said only a handful of properties in the NDMC area were such that came under the property tax purview. So, comparing the MCD and NDMC areas and then applying the same tax structure would not be appropriate, she added.

"Applying the same rateable method in the NDMC area as is being used in the MCD area will not be correct. In Lutyens' Delhi, of the total of over 12,000 properties, only 1,883 are residential properties that come under the property tax net. Interestingly, of them 66 are such that contribute nearly two-third of the total property tax collection. So the situation is so complex that we need experts to calculate and frame a new structure for the NDMC area following the same principles of the new unit area method regime," she asserted.

Significantly, the Delhi Government's Department of Urban Development had in early 2003 conveyed the wishes of the then Delhi's Lieutenant-Governor, Vijai Kapoor, to have a uniform property tax system in the entire Delhi. Even the Delhi Government as well as the Centre wanted the NDMC to adopt the new tax regime at the earliest.

"We surely want to implement the new tax regime as it is a progressive and less complicated tax structure but only after working out a new rateable method," Ms. Khullar added.

So for the time being, NDMC has decided to continue with its existing mechanism of property tax. It has also decided to continue giving rebate to those property owners who have adopted rainwater harvesting and keeping the transfer duty rate at 3 per cent.

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