Mumbai: BMC to now auction other properties of tax defaulters

Property tax is the major source of income for the Brihanmumbai Municipal Corporation. Representation pic

The civic body has started the process of appointing a private organisation to search for more immovable properties and investments of 67 defaulters in order to recover property tax. These property owners owe a total of over Rs 355 crore, which includes basic tax of Rs 268 crore and penalty of Rs 87 crore. This is the first time that the BMC has taken steps to seize and auction other properties of property tax defaulters.

Property tax is a major source of income for the Brihanmumbai Municipal Corporation (BMC). But it has not been able to meet the property tax target for the past seven years and overall revenue has seen a notable decline. In the current financial year, the civic assessment and collection department has collected Rs 4,767 crore till March 22, with less than a week in hand before the financial year ends. The target was Rs 7,000 crore, considering a 14 per cent hike. However, the state government struck down the hike and the BMC revised its target to Rs 4,800 crore. Last year, 2021-22, the total property tax collection was Rs 5,792 crore.

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Properties seized

The civic body has initiated action against property tax defaulters and seized properties of 67 defaulters under various categories like residential, industrial, commercial and open space. These property owners owe a total of Rs 355.19 crore. Now, the BMC will hire a private organisation to search for immovable properties and investments of these 67 defaulters in order to recover the entire amount.

Property tax has to be deposited within 90 days of receipt of property tax bills. If the tax is not paid during this period, the BMC takes action like sending a notice. The next step is a final notice of 21 days to the property holder. After that, actions such as disconnection of water supply, confiscation of property, etc. are taken. The BMC can even auction properties for collection of property tax from defaulters and the regulation was passed in February 2021.

‘A tedious process'

"But many times auction of the said properties does not yield the desired amount. So after the approval by the law department, the tax assessment and collection department decided to auction other profitable assets including non-movable properties of defaulters. But it is a very tedious process to collect documentary evidence against defaulters, which is why the BMC will appoint a professional institute to do the work," said an official from the Tax Assessment and Collection Department.

"These will be law firms which have the expertise to collect details from various authorities regarding the properties of defaulters. The process of appointment will be completed by April end and the institutes have to submit details of properties of defaulters within 60 days," said a BMC official. He added, "The scope of work includes searching for registered immovable properties of the defaulters, collecting documentary evidence of ownership of those registered properties, interests and directorships of the defaulters, searching for commercial entities, establishing the investments and financial interests of the defaulters in those entities. It will help to collect the tax from defaulters." The BMC has selected 67 habitual defaulters for action. Based on the success of the initiative, action will be taken against other firms.

Rs 355.19 cr
Amount the defaulters owe the BMC