Mumbai: BMC to take property tax from everyone this year

There will be no early-bird discounts this year. Representation pic

Facing a financial crunch, the Brihanmumbai Municipal Corporation (BMC) has decided to collect property tax for the current year from everyone, including houses measuring less than 500 square feet. The decision is expected to create a political row as it was the ruling Shiv Sena which had pushed to waive off the tax for smaller houses.

There was also a demand to waive off property tax this year due to the pandemic, but the civic body did not receive any clarification from the state government. As such, it has decided to collect the tax, which is the second-largest source of revenue.

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As per the estimates of the 2020-21 budget, the civic body should net Rs 6,768 crore in property taxes, which is one-fourth of its total income. Generally, property tax bills are distributed in April and the BMC announces around 2 per cent discount for early payment. But this year, as the lockdown started in March, various groups and political leaders demanded that it be waived off. The BMC wrote to the state's Urban Development department for clarity. "We were hoping that the decision will be taken in the monsoon assembly session. But there wasn't any clarity even after that," said an officer with the assessment and collection department of the BMC.

Additional Commissioner P Velrasu confirmed the move. "The property tax bills will be issued soon," he said. "The notices will be sent within a fortnight and there won't be any early bird scheme as hardly four months are left in the financial year," said Sunil Dhamne, deputy municipal commissioner.

Last year, the corporation delayed sending bills due to ambiguity over taxes for smaller homes. There are around 4.20 lakh property tax payers in the city, including 1.36 lakh having homes measuring less than 500 sqft. Bills to these homes weren't dispatched last year. This year, the corporation will also issue tax demand notices to residents having houses measuring less than 500 square feet.

"As per a Government Resolution (GR) in 2019, only the general tax component in property tax can be waived off. So we have decided to issue bills by deducting the general tax component for houses measuring less than 500 square feet," said a BMC officer.

In March 2019, the then BJP government approved to amend the Property Tax Act to effect the waiver. But the GR in 2019 only amended section 140 (C) of the Act, which caters to the general tax component, merely 10 to 30 per cent of the total. The remaining components are water tax, stormwater drainage tax, BMC education cess, state education cess, employment guarantee cess, tree cess, road tax, etc. The current government has not taken a decision on the matter yet.

30%
Max share of general tax component in property tax

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