This year, the corporation will issue tax demand notices to residents having houses measuring less than 500 square feet. As per the estimates of the 2020-21 budgets, 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. An officer with the assessment and collection department of the BMC said that they were hoping that the decision will be taken in the monsoon assembly session. But there wasn’t any clarity even after that.
In the present scenario, BMC is going through a financial crisis that is the reason they have decided to collect property tax for the current year from everyone, including houses measuring less than 500 square feet. The decision is expected to create a political row as it was the ruling Shiv Sena which had pushed to waive off the tax for smaller houses. 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. As such, it has decided to collect the tax, which is the second-largest source of revenue.
Sunil Dhamne, deputy municipal commissioner said “The property tax bills will be delivered as soon as possible, the notices will be sent within a fortnight and there won’t be any early bird scheme as hardly four months are left in the financial year.”
Additional Commissioner P Velrasu said that the BMC will not be able to give any exhumations this year in property tax. Last year, the corporation delayed sending bills due to ambiguity over taxes for smaller homes. There are around 4.20 lakh property taxpayers in the city, including 1.36 lakh having homes measuring less than 500 sq ft. Bills to these homes weren’t dispatched last year. As per a Government Resolution (GR) in 2019, only the general tax component in property tax can be waived off. So BMC has decided to issue bills by deducting the general tax component for houses measuring less than 500 square feet.
In March 2019, the then BJP government approved to amend the Property Tax Act to affect 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, storm water 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.