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MCD to auction property of major tax defaulters

Sandeep Joshi

Will publicly display their names and then auction their properties


  • From Wednesday MCD will be displaying huge hoardings on all major crossings and important places
  • Hoarding will carry names of those defaulters who owe to the MCD more than Rs. 1 lakh as property tax

    NEW DELHI: Alarmed over poor response from defaulters to property tax notices served on them, the Municipal Corporation of Delhi has decided to auction properties of major defaulters to collect their dues. The civic body is ready with a plan wherein it will first publicly display names of major defaulters and then auction their properties if they refuse to fall in line.

    From Wednesday, the MCD's Assessment and Collection Department will be displaying huge hoardings on all major crossings and important places at Defence Colony, New Friends Colony, Friends Colony, South Extension Part-I and II, Sukhdev Vihar, Chittaranjan Park, Greater Kailash Part-II, Govindpuri and Malviya Nagar. The hoarding will carry names of those defaulters who owe to the MCD more than Rs.1 lakh as property tax.

    According to a senior Assessment and Collection Department official, over a month ago, they had served around 50,000 notices to those tax defaulters who were to pay more than Rs.1 lakh as on March 31, 2004. "However, the response to this was very poor as only around 15 per cent of them responded to the notices. It is an alarming situation as we are far behind in property tax collection this year. So we have decided to act strictly that will include auctioning of those properties whose owners fail to clear their dues." "Past experiences have shown that the public display of the names of tax defaulters works for us, as almost 90 per cent of those whose name figure in the list end up paying their dues as social prestige is attached to it," the official said, adding that the list would be displayed in other areas also so that fast recovery of dues could be achieved. Interestingly, though the MCD had sent auction notices to defaulters in previous years, it never took the harsh step.

    The major reason behind the move is the MCD's failure to meet the target of property tax collection that forms a major chunk of its revenues. This year it has set a target of over Rs.1,300 crores, while it is still to collect almost Rs.900 crores with not even three months remaining in this fiscal. Last year when the new Unit Area Method was implemented, the civic body had managed to collect only Rs.835 crores as property tax and this year it is not even likely to cross the Rs.800-crore mark. Importantly, property tax is a major source of revenue for the civic body as around 80 per cent of the taxes collected come from it alone. Prior to introduction of the new method, the MCD collected a record Rs.920 crores in 2003-04 and over Rs.1,200 crores in 2004-05. However, in the changed scenario, it managed to collect only Rs. 835 crores in 2004-05, a deficit of almost Rs.400 crores.

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