The BMC will soon impose harsher tax penalties in cases of unauthorised construction or unauthorised extensions to existing structures. The move, coming after a delay of five years, will be implemented by year-end. The provision to levy property tax on twice the built area that is illegal was actually made in 2010 through an amendment to Section 152 of the Mumbai Municipal Corporation Act, 1888. The amendment was made when the civic body shifted to the capital-value based system of property tax assessment in 2010. Based on this amendment, property tax is charged based on the market value of the area, as opposed to the previous system of assessing tax on a property’s rateable value, or its notional rent-earning capacity. [related-post] A senior official from the property tax department of the BMC said, “Although the amendment was made in 2010, not many steps were taken by the corporation to implement it on time. A committee was set up to look into the matter only in 2014. We have submitted a report and will most likely implement it by the end of the year.” According to civic officials, if a construction measuring 1,000 square ft is found to be illegal, property tax will be charged on 2,000 square ft. “The respective ward offices will be in charge of determining the illegality of a construction,” the official added. Simultaneously, officials confirmed, the levy and collection of property tax, including the penalty, would not be construed as authorising the illegal construction. According to an affidavit submitted by the BMC to the Bombay High Court last year, there are more than 56,000 illegal structures in the city. With the anticipated introduction of the goods and services tax from 2016, the civic body is fearing a loss of over Rs 8,000 crore generated by octroi alone. Sources said the civic body was looking at tapping every revenue source, apart from working on different financial models. tanushree.venkatraman@expressindia.com
