The standing committee of the East Municipal Corporation on Thursday approved collection of property tax from unauthorised colonies.
While it is yet to be approved by the East corporation House, the move will affect the 243 unauthorised colonies under the civic body’s jurisdiction.
This is in contradiction to the orders of the Delhi government, which has restricted the municipal corporations from collecting taxes from these colonies.
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Speaking to The Indian Express, East Delhi Commissioner Amit Yadav said the standing committee had passed collection of property tax from unauthorised colonies as one of the measures to pull the East body from its financial crisis.
The three municipal corporations have been demanding that property tax be levied on all 1,642 unauthorised colonies in Delhi (according to the Department of Urban Development website) since it was a unified body.
In 2012, estimating an earning of almost Rs 350 crore from such colonies all over Delhi, the Property Tax department wrote to then Lieutenant-Governor Tejendra Khanna seeking approval for collection of tax from unauthorised colonies.
The corporations stated that under the United Area Method that it implemented in 2004, the onus of paying property tax lies with the property owner. As such, some tax was being collected from the unauthorised areas until 2013 when Congress banned corporations from collecting tax in such areas.
However, the demand was refused. Even in the case of the 895 newly regularised colonies, the Delhi government in 2013 refused collection of property tax till basic amenities were provided.
However, the East corporation has argued that the Delhi Municipal Corporation (DMC) Act, 1957, makes collection of property tax a prerogative of the municipal bodies and does not make a mention of regularised or unauthorised colonies. The proposal will now be put to vote in the house meeting of the East body on June 24.
“I am confident that the House will also pass this resolution. We are in acute shortage of funds and we need to collect revenue from where ever possible, especially if the DMC Act allows us to do so,” standing committee chairperson in East corporation Lata Gupta said.
Section 114 of the DMC Act, 1957 states, “Property taxes shall be levied on lands and buildings in Delhi”. As such owners of even unoccupied pieces of land in Delhi that come under the jurisdiction of the corporations are liable to pay taxes to the civic bodies.
The latest government bail out to the East corporation of Rs 180 crore has allowed it to clear salaries of employees until May 31. However, the civic body is now placing measures in place to increase its revenue so that salaries to its employees are not delayed further. The corporation has seen two employee strikes in March and June this year owing to salary delays.