BMC: All houses below 500 square feet won't be taxed, for now

Decision comes in view of Shiv Sena's proposal to waive off property tax for all houses below 500 square feet

Following a clash with Shiv Sena over its proposal of waiving off property tax for all houses below 500 square feet, the Brihanmumbai Municipal Corporation (BMC) put on hold its plan of imposing the tax on slums. However, at a time when the cash-strapped civic body is trying to create more sources of income, this step will force it to give up on an expected annual revenue of Rs 250 crore.

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According to the officials from the assessment and collection department of the civic body, the BMC had proposed to levy property tax of Rs 2,400 to Rs 1,800 on each slum structure, depending on its type and size. In April, the civic body in its budget of 2017-18 had proposed to impose property tax on slums, so that they can earn an annual revenue of Rs 250 crore. A senior civic official from the department said, "The proposal has been put on hold. We were ready to go ahead with the plan, but as Sena has proposed tax exemptions on houses upto 700 square feet, we decided to keep it on hold. The Sena's proposal has been sent to the Urban Development Department for approval, as the BMC Act, 1888, needs to be changed for its implementation."

He further said, "If the state allows rebate on houses which are less than 500 square feet, then there is no question of imposing property tax on slum structures. Also, in order to levy property tax on slums, we will need to change the BMC Act, as currently there is no such provision." Meanwhile, sources said that if the tax waiver proposed by Sena comes into effect, then it would put a burden of Rs 500 crore on the BMC. Hence, the civic body would lose a total revenue of Rs 750 crore.

Speaking to mid-day, B G Pawar, deputy municipal commissioner of assessment and collection department, said, "As per the proposal sent to the state government, all types of residential structures below 500 square feet will be exempted from paying property tax. The government will take the final decision on this."

Rs 250cr Total revenue BMC is expected to lose for not imposing property tax on slums
Rs 500cr Total revenue BMC will lose if Sena's tax waiver proposal comes into effect

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