Mumbai News: BMC's Revenue From Property Tax Takes A Beating

Mumbai News: BMC's Revenue From Property Tax Takes A Beating

To recover this loss, the civic body is preparing a comprehensive policy to collect water charges and sewerage charges from residential properties with a carpet area of less than 500 sq ft.

SHEFALI PARAB-PANDITUpdated: Friday, February 02, 2024, 10:41 PM IST
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BMC headquarters | File photo

Mumbai: The BMC earned a revenue of only Rs605 crore between April 1, 2023 and January 31, 2024, from property tax, the second-highest revenue source. Being an election year, there will be no rise in tax (for the fourth consecutive year) in 2024-25. The revenue from the property tax has now been revised to Rs4,500 crore, a fall by Rs1,500 crore. To recover this loss, the civic body is preparing a comprehensive policy to collect water charges and sewerage charges from residential properties with a carpet area of less than 500 sq ft.

BMC earns around 24% of revenue from property tax

The BMC earns around 24% of revenue from property tax. However, it has seen a decline in revenue collection in the last two years. The exemption of property tax for residential properties up to 500 sq ft resulted in a loss of Rs462 crore. Moreover, the revision in tax that was due in 2020-21 was deferred due to the pandemic and continued till 2023, which decreased revenue by Rs1,080 crore. 

Further, the civic body faced a major setback after the Supreme Court, in March 2023, rejected a review petition filed by it challenging a high court order in 2019 that set aside certain rules framed for retrospective tax assessment. Due to legal complexities in the BMC’s retrospective tax assessment, the civic body is yet to send the bills to the taxpayers for the current financial year 2023-24.

Municipal commissioner and administrator Iqbal Singh Chahal said, “The decision not to hike the property tax for 2023-24 will be taken in the state cabinet meeting on Monday. We can start sending bills for the current financial year starting next week.” 

With just two months left for the end of financial year 2023-24, the BMC will have to collect Rs3,895 crore by March 31 to meet the current financial year’s target.

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