Cash-strapped BMC grants no relief over property tax in Mumbai

Cash-strapped and desperate, the Brihanmumbai Municipal Corporation (BMC) has finally decided to collect property tax for the current year from everyone, including houses /units admeasuring less than 500 square feet.

Stating a lack of clarity from the state government over waiver to be offered, the civic administration has decided to generate property tax bills for all.

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.

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. Hence, the components of the taxes that could be waived stay undecided. "The confusion, that we were not clear whether the state’s intent is a complete waiver or merely the base amount waiver in the form of general tax which comprises 30 per cent of the total property tax component.

However, we have decided to generate bills for everyone accordingly. We have consulted our legal team on the same," said a BMC official. Property Tax is the second-largest source of revenue for BMC.

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.

Additional Commissioner P Velrasu said, " Yes, we have started generating bill and we will start issuing the bill to everyone this year."

Mumbai has over 4.2 lakh property owners. As per the property tax and assessment department, 1.37 lakh people, owning houses of area up to 500 square feet, are eligible for a complete property tax waiver.

For the corporation, property tax becomes the biggest source of income (24 percent) for the civic body after the octroi was abolished. BMC has failed to achieve its target since the financial year 2016 to 2017. It had set a target of Rs 6,788.58 crore from property tax collection for 2020 to 2021.

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