Govt not too keen, New property tax rates will kick in next fiscal

Govt not too keen, New property tax rates will kick in next fiscal

BENGALURU: The proposed hike in property tax will come into effect from March 2020, the next financial year, due to a delay on the part of Bruhat Bengaluru Mahanagara Palike (BBMP) in putting up the proposal before the council, and the state government in accepting it.BBMP proposes to revise property tax of residential properties by 25% and commercial property tax by 30%, as per the Karnataka Municipal Act.

Though the proposal was prepared by BBMP officials in February, the state government was not keen on implementing it from March. “It was supposed to come into effect from this fiscal, but the government withheld it as it did not want to hurt the sentiments of voters, and the model code of conduct also came into effect. Now, even if the council approves the proposal, it cannot be introduced in the middle of the financial year, from July or August. So it will apply only from the next cycle, a financial loss and delay of one year,” said a BBMP official.

Venkatachalapathi, Joint Commissioner, Revenue, BBMP, said that as of June 7, BBMP has collected Rs 1,590 crore as property tax. The target for this fiscal is Rs 3,500 crore, but so far, it hasn’t mopped up even half the revenue. Last year, BBMP had set a target of Rs 3,100 crore as property tax collection.

He said it will take at least 2-3 months for the proposal to be implemented, as it also needs government approval. Besides, it will also be unfair to those who are yet to pay, for the higher cess will apply. He added that those paying property tax now will pay the same amount, with 2% penalty every month.

SP Hemalatha, chairperson, Standing Committee on Taxation and Finance, said the idea of revision is only to increase revenue, but will take long as the proposal is not yet placed before the council. “BBMP needs funds, so we have calculated it by changing registration of B-khata to A-khata for sites, so that around Rs 3-4 crore is generated. Arrears will amount to another Rs 800 crore. This should help to some extent,” she said.

[“source=newindianexpress”]