Dear Delhi may get dearer

MCD proposes 15-20% tax hike for properties in city; new professional tax proposed

MCD proposes 15-20% tax hike for properties in city; new professional tax proposed

Life in Delhi may just get costlier, especially if you love the luxuries. If the budget proposals of the Municipal Corporation of Delhi (MCD) are adhered to, you could end up paying more for eating at restaurants, shopping at malls, relaxing at clubs and even for your child's education.

The MCD, in its proposals for the 2010-11 budget submitted on Wednesday before the Standing Committee, has sought to increase property taxes and introduce a new category for professional tax.

Money wise: MCD Commissioner KS Mehra addressing the budget session at Town Hall in New Delhi on Wednesday. PIC/IMTIYAZ KHAN

Rs 6,346.70 cr
Is the budget estimate for the year 2010-2011

Expensive property

According to the MCD proposal, property tax in the city will be increased by 15 to 20 per cent.

While smaller commercial properties will see lesser increase in taxes, a hike of 20 per cent has been proposed for rented non-residential properties catering to the good life. These include hotels above three-star, air-conditioned gymnasiums, clubs with swimming pools, banquet halls and coaching centres with facility to accommodate more than 50 students.

Non residential properties that are self-occupied will be taxed at the rate of 15 per cent. Earlier, taxes for all non-residential categories, were equal. As for residential property tax, it has been increased by five per cent from 10 to 15 in four categories that cover posh localities like south Delhi. Smaller houses in not-so-popular areas will see a hike of six to 11 per cent in property tax.

Taxed earning

The new professional tax will be levied on any professional or trader who is earning more than Rs 30,000 per month. MCD Commissioner KS Mehra said the tax can be anything between Rs 100 and Rs 200 per month.

However, it can not be more than Rs 2,500 per month. "The details will be worked out later. It will be made people-friendly," said Mehra.

The proposals have been calculated to meet the increased expenditure of MCD after the implementation of the Sixth Pay Commission. It should be studied thoroughly and taxes should be minimised.
Vijender Gupta, BJP councilor and former chairman of the Standing Committee

MCD can levy such a tax (professional tax) under the discretionary tax system. These proposals will help the MCD earn an additional revenue of Rs 500 crore a year which will help in providing better services to the people
MCD Commissioner KS Mehra

MCD's services are very poor. The taxes will further burden the aam admi
Subhash Gupta, former Youth Congress spokesperson

Tax talk

MCD Commissioner KS Mehra began his budget speech at 12.02 pm. However, as soon as he started, the mike developed a problem and had to be adjusted. His speech continued till 1.03 pm. He did not take any break neither did he drink water. Reading his speech in Hindi, he said it took him over a month to finalise the budget.

Spending spree

Out of every Re 1 collected by MCD, 22.79 paise will be spent on education, 15.64 paise on engineering, 13.39 paise on public health, 13.34 paise on environment improvement and cleanliness, 13.62 paise on general administration, 6.72 paise on payment of loans, 2.33 paise on community service and 3.27 paise on forest and horticulture