The Hindu : Karnataka / Bangalore News : Property tax rate in Bangalore may be slashed

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Tuesday, Jul 15, 2008
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Karnataka

Karnataka - Bangalore

Property tax rate in Bangalore may be slashed

S. Rajendran

Tax collection was suspended for five months

Authorities to hold public hearing on the CVS system today
BJP Government keen on settling the property tax issue amicably

Bangalore: A Cabinet sub-committee of the State Government is stated to be serious on slashing the property tax rate in Bangalore should the Capital Value System of collecting taxes be implemented.

Property tax collection in the city remained suspended for nearly five months with one section of the property owners favouring the Capital Value System and another preferring the Self-Assessment Scheme introduced by the S.M. Krishna Government.

Sub-committee

Soon after the Bharatiya Janata Party Government took charge in the State, in one of the first Cabinet meetings held, Chief Minister B.S. Yeddyurappa appointed a Cabinet sub-committee under the chairmanship of Minister for Transport R. Ashok to go into the whole gamut of the property tax collection system in Bangalore and suggest ways of rectifying the anomalies, if any.

The crux of the problem has been the long-pending proposal to introduce a capital value-based system in preference to the existing Self-Assessment Scheme for netting property tax.

Tax rate

In all likelihood and subject to the approval of the State Cabinet, the CVS rate for domestic self-occupied houses and houses which have been rented out in Bangalore, the property tax rate will be slashed by 50 per cent to that proposed earlier.

The earlier proposal was 0.25 per cent for self-occupied houses, 0.5 per cent for those rented out, 0.2 per cent for vacant sites, one per cent for industrial properties and 2 per cent for commercial properties.

Yardstick

Under the CVS, the guidance value for properties fixed by the Revenue Department is the yardstick for calculation.

The Government has directed the authorities to hold a public hearing on Tuesday to seek the views of residents’ associations on the CVS and other issues pertaining to Bangalore, and nearly 400 residents associations have been invited.

Apart from Mr. Ashok, the other members of the Cabinet sub-committee are Minister for Information Technology and Biotechnology Katta Subramanya Naidu, Minister for Rural Development and Panchayat Raj Shobha Karandlaje, Minister for Higher Education Arvind Limbavali and Minister for Medical Education Ramachandra Gowda. All these Ministers represent Bangalore city constituencies in the Legislative Assembly.

The BJP Government is keen on settling the property tax issue amicably, more so, since the elections to the Bruhat Bangalore Mahanagara Palike council are round the corner.

BBMP open

Commissioner of the BBMP S. Subramanya said: “The BBMP is open for any of the property tax collection system, be it the SAS or the CVS. However the SAS requires a legislative backing which the CVS presently enjoys. The BBMP has been deprived of property tax for the last six months and this “abeyance order” has to be revoked at the earliest.”

It should be noted that if the SAS is implemented, then the revenue inspectors of the BBMP and other officials will have a say in fixing the property rates in each municipal corporation zone (resulting in discretion) while under the CVS, it is the Revenue Department which fixes the guidance values.

Little room

Sources in the Government told The Hindu here on Monday that there was little room for the Government to adopt any other property tax collection system unless there is new legislation and to bring forth a new legislation is time-consuming.

Collection of property taxes in Bangalore has been suspended since March when Governor Rameshwar Thakur (during the President’s Rule) decided to keep the collection in abeyance pending a decision on the objection raised against the CVS.

In the view of the Law Department, there is no escape from implementing the Capital Value System, which is the main component of the amendment brought forth in 2003 to the Karnataka Municipal Act.

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