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EMI option for property tax in Bengaluru: New proposal aims to simplify payment
The State Finance Commission's latest report highlights a major revenue opportunity: bringing 5 lakh unassessed properties into the tax net using GIS-based e-khata systems.
The EMI option may help in increasing property tax collection efficiency (File photo).
Concerned that outstanding property tax payments could hinder resource mobilisation for the five city corporations under the Greater Bengaluru Authority (GBA), the State Finance Commission (SFC) has proposed a unique solution: an EMI scheme for property tax payments.
The move, as per the fifth SFC report on five city corporations under GBA, would help in increasing property tax collection efficiency. “A lump-sum payment each year might be difficult to manage, and splitting it into monthly payments might make it easier to pay while also softening the impact,” the report said.
It also recommended rebates for timely payment of property tax, similar to the 5 per cent rebate offered by the erstwhile Bruhat Bengaluru Nahanagara Palike (BBMP). Such a measure, the SFC observed, “can also incentivise people to pay on time.”
As of September last year, the BBMP had identified around 2.75 lakh defaulters who owed Rs 786 cr in property tax dues. This was after the civic body collected around Rs 1,200 crore in outstanding dues through a one-time settlement scheme, which offered a full waiver of interest on arrears and a 50 per cent reduction in penalties.
According to the SFC, bringing unassessed properties under the tax net was expected to add approximately Rs 1,000 crore annually to the property tax revenue of five city corporations. It was being done by integrating the GIS-based e-khata system with the property tax system. “There are nearly five lakh properties that have not been brought under the tax net and remain unassessed,” the report noted.
Another recommendation was to establish systems to cross-check property tax records with BESCOM data, especially for new connections, using GBA’s building licence data.
On state funds to the newly formed city corporations under GBA, the SFC recommended “a grant of at least 40 per cent” so that the corporations have the freedom to spend the amount on local needs.
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Apart from this, the report recommended performance grants to corporations that fulfil certain criteria, one-time establishment grants, and special grants to GBA. The special grants include Rs 15 crore to prepare a Master Plan for GBA, Rs 25.95 crore for “Geo spatial Decision and Planning Support and integrated command and control centre”, and Rs 35.06 cr for ward-level IT-enabled services in 369 wards.
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