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Friday, November 27, 2020

A year on, BMC says only ‘general’ component of property tax to be waived

Officials said property tax comprises eight components, including general tax, water tax, sewerage tax, education cess, tree cess and water benefit tax among others. General tax constitutes around 10 per cent to 30 per cent of the total amount.

Written by Sanjana Bhalerao | Mumbai | Updated: November 2, 2020 11:53:18 am
mumbai encroachers, mumbai nullah, bmc, mumbai property encroachers, mumbai news, latest newsThe BMC, in March, had started work to cover and widen the nullah, which is around 15 feet, by putting concrete slabs on it.

A year after then Devendra Fadnavis government cleared a Bill to exempt property tax of residential properties measuring up to 500 sq ft in Mumbai, the BMC is likely to exempt only the “general tax” component of the tax.

Officials said property tax comprises eight components, including general tax, water tax, sewerage tax, education cess, tree cess and water benefit tax among others. General tax constitutes around 10 per cent to 30 per cent of the total amount.

Joint Municipal Commissioner (Assessment) Sunil Dhamne said, “We have taken opinion from (BMC) law department and only general tax will be exempted. No other component will be waived.”

Last year, the state had issued a notification on providing the waiver, but the components of the tax that would be waived remained undecided. In January, BMC did not issue tax bills to residential properties measuring up to 500 sq ft in the city, given the lack of clarity.

According to an estimate, if all components of property tax for 500 sq ft homes are waived, the BMC will annually lose revenue of around Rs 350 crore.

Dhamne, however, said: “We have not yet calculated the number of properties that will get the waiver… but the general tax amount will be waived.”

Property tax is BMC’s one of the biggest income sources (24 per cent) after Octroi compensation. Its collection has, however, dipped since 2016-17.

For the year 2018-19, while the target was Rs 5,206 crore, BMC collected Rs 5,082 crore. For 2019-20, the target was Rs 5,600 crore but only Rs 4,100 crore was collected. The BMC had set a target to collect Rs 6,788.58 crore as property tax in 2020-21. It is, however, unlikely to meet its target this time, as the civic body is already facing a shortfall in tax collection in the last six months.

Last March, then Fadnavis government, in the run-up to the Lok Sabha polls and in an attempt to woo the middle class, had decided to waive property tax for residential houses measuring up to 500 sq ft. Fadnavis had said the exemption would benefit 30 lakh Mumbaikars and 18 lakh residential properties. The proposal of property tax waiver was first announced by then Shiv Sena president Uddhav Thackeray during the civic body polls in 2017.

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