With its revenue shrinking, the Pune Municipal Corporation (PMC) has decided to increase the Annual Rateable Value (ARV) for the assessment of property tax so as to boost collection. The ARV remains the only main direct tax collection source after the abolition of Octroi and Local Body Tax (LBT). “The ARV should be increased every year in accordance with the increase in Ready Reckonor (RR) rates. However, the ARV has not been increased for more than two years, so it was decided to increase it marginally,” said Vilas Kanade, in-charge of the property tax department, PMC.
As per the new rates applicable from April 1, there would be an increase of 25 paise per sqft for residential properties, 50 paise per sqft for commercial properties, 10 paise per sqft for open plots, 20 paise per sqft for developed open space, 10 paise per sqft for parking for residential properties and 20 paise per sqft for parking for commecial properties.
He said the increase in ARV will not affect old properties but new properties that needed to be assessed for property tax. “The increase in ARV is marginal so it would not be too big for taxpayers. Around 50,000 properties were added last year in the tax ambit of the PMC,” Kanade said. Besides, around 1.5 lakh more properties, which fall in an area created by the merger of 11 villages recently, will be added over this, which means the ARV will be applicable on two lakh properties.
The PMC will charge 20 per cent tax on properties in the newly merged villages and increase it by 20 per cent each year, collecting the complete tax in the fifth year. Meanwhile, the PMC has dispatched the property tax bills to owners of 5.5 lakh properties who are regular taxpayers. The process of dispatching bills for 2.7 lakh more properties with dues has been started. “The number of properties in the tax ambit of the PMC will cross 10 lakh by this year,” Kanade said.
PMC’s jurisdiction is divided into 53 zones and 600 circles with the ARV fixed for each circle. The PMC gives discount to taxpayers who deposit the amount by July-end. Discount is also given to properties implementing eco-friendly initiatives of rainwater harvesting, solar power and vermicutlure projects. The PMC had collected Rs 1,094 crore in revenue in 2017-18, well below Rs 1,201 crore, which it collected in 2016-17. The civic body had set a target of Rs 1,800 crore for 2017-18 but could collect 65 per cent of it by the end of the financial year without increasing property tax rates.