The Hindu : Front Page : Property tax in Bangalore may go up by 20 per cent

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Property tax in Bangalore may go up by 20 per cent

Special Correspondent

Panel recommends that SAS be continued with

The rise will not be substantial in view of the depreciation in property value: Ashok
50 per cent tax concession suggested for those living in own houses

BANGALORE: The Cabinet subcommittee set up to finalise the system of collection of property tax in Bangalore and the implementation of the Akrama-Sakrama scheme (regularisation of unauthorised constructions) has recommended a 20 per cent increase in property tax. The Cabinet is expected to ratify the recommendation in a fortnight.

Minister for Transport R. Ashok, who heads the subcommittee, said here on Wednesday that the rise in property tax will, however, not be substantial given the depreciation in the value of property.

Property tax has not been revised in Bangalore for eight years and the collection of the tax has been suspended following the public outcry over the introduction of a capital value based system (CVS) of property tax collection.

Mr. Ashok said the subcommittee had recommended that the self-assessment scheme of paying property tax be continued with.

Acting on representations received from the people, Chief Minister B.S. Yeddyurappa constituted the Cabinet subcommittee to go into the issue of property tax collection.

Mr. Ashok said the subcommittee had recommended an increase of 20 per cent in the tax and also a 50 per cent tax concession for owner-occupied residential buildings. The self-assessment scheme would also be made applicable to theatres, malls and multiplexes. The Bruhat Bangalore Mahanagara Palike (BBMP) had six zones for collection of taxes, he said.

BBMP stand

Though the BBMP wanted a 30 per cent increase, the committee fixed it at 20 per cent. “It will not be a burden on the common people as the tax will not increase in real terms given the deprecation in property value. The Government will provide a major relief to owners of small property,” the Minister said.

As many as 15 lakh property owners will be brought under the self-assessment scheme. Earlier, only seven lakh property owners were paying the tax.

The estimated annual property tax collection following the 20 per cent rise will be Rs. 1,500 crore compared to the existing collection of Rs. 700 crore.

SAS preferred

Mr. Ashok said the State Government was all set to opt for only the self-assessment scheme for payment of property tax in the jurisdiction of the BBMP by deferring the implementation of the contentious CVS.

The BJP Government had deferred the CVS following widespread criticism from the people in the wake of the steep increase in property values.

In April 2000, the then Bangalore Mahanagara Palike introduced the self-assessment scheme which was welcomed by property owners.

The Janata Dal(S)-BJP coalition Government headed by former Chief Minister H.D. Kumaraswamy had sought to bring in the CVS in place of the self-assessment scheme.

The Minister said the committee members heard grievances of the taxpayers at meetings conducted in different parts of Bangalore city in the past few months.

The public too was in support of the self-assessment scheme. The BBMP stopped collection of property tax in April.

The committee will meet soon to discuss the contentious Akrama-Sakrama scheme for regularisation of unauthorised and illegal structures.

The payment of penalty will be introduced in two or three slabs. However, the Government will not burden small property owners, he said.

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