The Hindu : Front Page : Many houses out of tax net

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Friday, Apr 22, 2011
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Many houses out of tax net

N.J. Nair

Plinth-area-based assessment will offer relief to weaker sections

Self-assessment system to start soon
New system will make computation easy

THIRUVANANTHAPURAM: As many as 20 lakh houses will be exempted from the tax net once the plinth area-based building tax assessment system is implemented in the State.

Official sources told The Hindu here that 15 lakh houses constructed with financial assistance of various Central and State government agencies as well as five lakh houses with a built-up area of up to 300 sq.ft. will be exempted from the tax regime with the introduction of the new self-assessment system.

This will offer a substantial relief to the weaker sections and BPL families.

The proposed system is expected to give more leverage to house owners to fix the building tax against the indicators fixed by the government and also end the system of the officials fixing the rates in an arbitrary manner.

The indicators have been drawn up on the basis of the nature and use of each building and also the zone in which it is located.

The minimum and maximum limits of basic tax rate per sq.m. plinth area for different categories like residential, commercial and industrial buildings, schools, hospitals and such others have been laid out.

This will make the computation more easy and transparent.

The Local Administration Department has directed local self-government institutions to classify the area under their purview into different zones depending on the roads and other infrastructure facilities available in each locale.

Other than access to roads, age of the building, construction of the roof, walls and floor will be the main indicators for fixing the tax rate.

The fears that the self-assessment system would give way to a massive increase in tax slabs are reported to be baseless.

Sources said the maximum tax will not exceed 50 per cent of the current rate in the case of buildings which have not undergone a thorough structural change.

Arbitrary fixing

The current mode of fixing the rates in an arbitrary manner will be replaced by a scientific and transparent system.

Secretaries of civic bodies will scrutinise the tax details filled by house owners.

The decision to implement the new method has been made on the basis of the findings of the Local Fund Audit that about 15 per cent of the buildings are under-assessed.

The Fourth State Finance Commission headed by M.A. Oommen too had recommended to streamline the building tax assessment system and stressed the need for mopping up maximum revenue from this head, sources said.

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