The BMC has collected around Rs. 4,903 crores of revenue generated from property tax till March 28. The revised target for property tax collection for the year 2022 - 23 was Rs. 4,800 crores. With four days left to end the current financial year, the assessor and collection department is expecting more revenue to be added to BMC's kitty.
Property tax is second highest source of income for BMC
Property tax, which accounts for 24 per cent of revenue, is the second highest source of income for the BMC. In the previous year, the BMC had collected Rs 5,792 crore, while the estimate was of Rs 5,400 crore. In 2022-23, the BMC has set its target at Rs 7,000 crore. However, Maha Vikas Aghadi (MVA) government in January 2022, decided to exempt residential properties up to 500 sq ft from property tax, which resulted in a loss of Rs 462 crore. The current Eknath Shinde-led state government continued the property tax waiver in August 2022, which further led to a shortfall of Rs 1,080 crore in revenue for the current financial year.
Matter over new tax collection formula was in HC
The BMC had modified the existing formula of tax collection and decided to calculate on the basis of the capital value of the property in 2009. However, the new rule was implemented in 2012, with a decision to revalue the property tax bills by including the outstanding amount of the last two years.
The decision was challenged in the Bombay High Court (HC), which stated that tax cannot be levied with retrospective effect and capital value should be calculated on the basis of actual construction that has taken place on that plot. This decision was further challenged in the Supreme Court, which later upheld the HC decision. The BMC has filed a review petition in the Apex court on the issue in December 2022. If the decision moved in BMC's favour it would have increased the revenue. But now the BMC has revised the target to Rs. 4800 in the middle of the year, said a civic official.
Meanwhile, the BMC has given a target to officials of the assessor and collection department to trace the big defaulters and convince them to pay the dues on time. "Several actions and dedication of our officials have helped us to achieve the revised target. We are confident that we will recover the actual target of Rs. 6,000 crores by the deadline of March 31," said a senior civic official.
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