Early bird benefits for property tax payers

Those who pay the annual property tax bill by July 31 are eligible for a three per cent rebate.

| Mumbai | Published: June 25, 2014 1:02:02 am

The civic assessment and collection department has finally rolled out its early bird incentive scheme for property tax payers of Mumbai which offers a two to four per cent rebate to property owners who pay their taxes before July 31.

The scheme, which was to be implemented in the financial year of 2013-2014, was approved by the civic standing committee in July 2012 and will be implemented for the next two years on a trial basis.As incentive, the programme offers a six per cent tax rebate to taxpayers who pay the annual tax amount in full by June 30. This includes a two per cent rebate for paying the half-yearly amount (April to September) by this time and a four per cent tax rebate for also paying the second installment (October to March) by June 30. Those who pay the annual property tax bill by July 31 are eligible for a three per cent rebate, while those who pay the half-yearly amount by the end of July will receive a one per cent rebate.

”We started the scheme for tax payers in the first week of June and have already received payments from those wishing to avail of the benefits. Only those who do not have any outstanding dues are eligible for the rebate. If the tax payers clear their dues and the current bill payments along with any arrears by the stated deadline they will still be eligible for the tax rebate,” said a senior civic official of the assessment and collection department.The scheme has been introduced despite an on-going public interest litigation in the Bombay HC which challenges the calculation of property tax on built-up area rather than carpet area.After the civic body changed the property tax system from rent-value to capital value in 2010, the new formula for calculating tax was set as built-up area multiplied by the Ready Reckoner Rate of the property. This formula has been used to collect taxes since 2013 with arrears dating back to 2010.

However the PIL alleges the civic body has been collecting this wrongfully as in the provisions of the Mumbai Municipal Corporation Act, 1888, carpet area (not built-up area) is mandatorily used for calculating tax.“Since the matter is subjudice the department would not like to comment on the problem till the matter is resolved, we are accepting payments based on the built-up area only,” the official said.The BMC rolled out the new capital-value system, which came into effect in 2010, in 2013-2014 and has been plagued with glitches ever since. The new system bases taxes for all properties (old and new) on the Ready Reckoner Rate. While earlier, the rent value of the property was used to calculate the tax, the new system calculates property tax according to its use, construction, type and age.


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