The Hindu : Front Page : Property tax in the Capital to be doubled?

Online edition of India's National Newspaper
Saturday, Dec 09, 2006
ePaper

Front Page

Front Page

Property tax in the Capital to be doubled?

Sandeep Joshi

NEW DELHI: Alarmed over a fall in property tax collections in the Capital for the second year in a row, Municipal Commissioner A. K. Nigam on Friday proposed to double the property tax on non-residential commercial properties on rent, including schools. He also sought a hike in property tax on rented residential properties, besides increasing the tax on owners of farmhouses.

Though Mr. Nigam said he proposed no new taxes while presenting the Budget Estimates for 2007-08 in the MCD Standing Committee meeting, he sought a steep increase in the existing rate of property tax, particularly on rented properties.

As per the new proposal, on all rented commercial establishments falling in `A' to `H' category colonies, the rate of property tax would go up from 10 per to 20 per cent.

Similarly, a rented residential property falling in `A' to `E' category colonies would attract 15 per cent tax from next year if the proposals are cleared by the MCD House. The current rate of tax is 10 per cent.

In rented residential properties falling in `F' to `H' category colonies the property tax would be hiked from 6 per cent to 8 per cent. However, there would be no change in the tax on self-occupied residential properties.

The Municipal Commissioner has also proposed to increase the taxes on farmhouses. While there will be no change in the tax rate on self-occupied farmhouses, on those rented for residential purposes it would be hiked from 10 per cent to 15 per cent.

For farmhouse owners using their property for commercial use, the tax would be increased from 10 per cent to 15 per cent, while those who have rented it out for commercial use would have to pay tax at a new rate of 20 per cent from next year against the current rate of 10 per cent. Since the new unit area method for property tax collection was introduced in 2004, the MCD has failed to meet the target by a huge margin. While in the last fiscal (2005-06) the MCD had proposed to collect Rs.1,784 crores as revenue from property tax -- Rs.1,474 crores from tax in urban and rural areas and Rs.310 crores from duty on transfer of property, it managed to collect just Rs.715.54 crores -- Rs.373.39 crores from property tax and Rs.342.15 crores from duty on transfer of property.

Printer friendly page
Send this article to Friends by E-Mail

Front Page