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Wednesday, January 27, 2021

BMC to start issuing tax bills for homes up to 500 sq ft

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

Written by Sanjana Bhalerao | Mumbai | January 5, 2021 3:26:40 am
BMC tender scrapped, Shiv sena, municipal schools, Mumbai news, Maharashtra news, Indian express newsBMC has a total of over 4.20 lakh property taxpayers in the city, including 1.36 lakh homes measuring less than 500 sq ft.

Four years after the Shiv Sena promised exemption of property tax for residential properties measuring up to 500 sq ft in Mumbai, BMC will, starting this week, start issuing tax bills to such properties exempting only the “general tax” component of the tax.

In 2019, the state government cleared a Bill to exempt property tax of residential properties measuring up to 500 sq ft in Mumbai, but the components of the tax that would be waived had remained undecided. In January last year, BMC did not issue tax bills to residential properties measuring up to 500 sq ft in the city, given the lack of clarity.

“The property tax bills, including for residential properties measuring up to 500 sq ft area, are in the printing process and we will start issuing the bills this month,” said an official from the assessment and collection department.

BMC has a total of over 4.20 lakh property taxpayers in the city, including 1.36 lakh homes measuring less than 500 sq ft. As per an estimate, if all components of property tax for 500 sq ft homes were waived, BMC would annually lose revenue of around Rs 350 crore. Property tax comprises of 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.

Property tax is one of BMC’s 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. 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.

Allies turned opposition, the BJP and the opposition party in BMC, Congress has been attacking the Sena for going back on its promise of complete tax exemption.

Opposition parties in BMC, including Congress and NCP, took on Shiv Sena and the civic administration last week over going back on their word on waiving property tax for residents who stay in homes measuring less than 500 sq ft. The BJP on Monday walked out of the law committee meeting over the issue. 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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