Mumbai: BMC To Issue Delayed Property Tax Bills For 2023-24 Fiscal Year; Faces Challenges Due to Retrospective Tax Assessment

Mumbai: BMC To Issue Delayed Property Tax Bills For 2023-24 Fiscal Year; Faces Challenges Due to Retrospective Tax Assessment

The BMC introduced a capital value system for calculating property tax and levying new rates in a retrospective manner from 2010 onwards.

SHEFALI PARAB-PANDITUpdated: Wednesday, November 29, 2023, 09:59 PM IST
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BMC

Mumbai: After a delay of eight months, the BMC will be sending property tax bills for 2023-24 fiscal year from Friday. The bills were delayed due to legal complexities involved in the BMC's retrospective tax assessment. The taxpayers will now receive provisional bills, including a 10 per cent hike as per the five-year rule. However, the delay added only Rs. 542 crores of revenue to the BMC's kitty between April to November. The expected revenue for the current fiscal year is Rs. 4,500 crores.

The BMC introduced a capital value system for calculating property tax and levying new rates in a retrospective manner from 2010 onwards. In 2019, the Bombay High Court set aside certain rules pertaining to retrospective taxation. The BMC had challenged the order before the Supreme Court, but it got no relief. The apex court has directed the BMC to frame new rules and issue fresh bills to taxpayers. As a result, the civic body might also have to refund thousands of crores of rupees to the taxpayers who have paid property bills on the basis of the capital value system between 2010-2012. So, the BMC has to rework the capital values of all the properties besides refunding or adjusting the excess amount collected from the citizens in future bills.

Citing inability to refund such a hefty amount, the municipality has requested the state government to make amendments to the BMC Act. As the matter is yet to be sorted, it has failed to send property tax bills for the period April 1 to September 30. So, to avoid further delay, the BMC will be sending provisional bills as per ready reckoner rates for April 1 to September 30, 2023, and October 1 to March 31, 2024, together. The excess amount collected from the citizens will be refunded or adjusted in future bills. A senior civic official said, 'The distribution of provisional bills will start from December 1. The taxpayers will have to pay the first bill (April 1 to September 30) by January 15. The other six-month bill (October 1 to March 31, 2024) will have to be paid by March 25, 2024.'

Only 12 per cent of property tax revenue is in BMC's kitty

The BMC has estimated Rs. 4,500 crores from the property tax for 2023-24 fiscal. Since the bills are delayed, the civic body could get only Rs.542 crores of revenue in its kitty by November 27. Last year during this period, the BMC earned Rs. 1,452 crores of revenue. The official of the assessor and collector department claims that the revenue collected till now was from previous year's arrears and once the bills are sent they will surpass the target by Rs. 700 crores this year.

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