December 26: The BMC plans to introduce its new system of assessing property tax from April 1 onwards, thus putting an end to the old order which had the tax-payers at the mercy of civic investigation officers who arbitarily decided the value of their properties for leving property tax.The new system, modelled by Tata Institute of Social Sciences is a simple, transparent procedure based on the `capital value' of property given in the state government's ready-reckoner for collection of stamp duties. ``Any person having a copy of this ready-reckoner only needs to know the built-up area of his property to deduce the new property tax,'' said a highly placed civic official.For example for a residential structure, say 500 sqft flat in a 10-storeyed building located on M G Road, Ghatkopar, the property value given in stamp duty ready reckoner is Rs 2,500. Then the property tax will calculated thus : firstly 25 percent of property value is taken which is 625 in this case. It is then multiplied with `C' (construction categorization - the value is given in the table). As the said case falls in C3 category and as C3=1.00, it will be 625 X 1 = 625. This (625) is then multiplied with the built-up area of the flat (in sq ft), which as per our example is 500 sq ft, so 625 X 500 = 3,12,500. With this figure the property tax is deduced by taking the percent of U ( User categorisation (given in table). In the given example as the property is residential, U2 =1 and so the property tax is 1 percent of 3,12,500 which is Rs 3125. If the same property would have been an office (U5 category), the property tax would be 3.5 percent of 3,12,500 (that is if the property value is Rs 2,500). Thus the formula for calculation property tax is - A = 25 percent of property value multiplied by C multiplied by area in sq ft. The property tax will be U percent of A.The new revamped system of property tax will increase the tax rates for properties in cities, while decrease for those in suburbs. However the rate calculated as per revamped system will not be effected soon. The civic administration has decided to bridge the gap between the old and new property rates in steps. So in the year 2001-2002 the property tax will be the average of old and new property tax rate. This is a shock absorber of sorts for people whose difference in the new and old property tax rates is high.The revamped system of property tax deduction will need approval from the Standing Committtee, the civic general body and then from the state government before coming into effect. The administration hopes to get these cleared before April 1.The present Property tax is a sum of General Tax, Water tax, water benefit tax, sewage tax, education cess, state education cess, employment guarantee cess, tree cess and street tax. However the new property tax will not include water tax and sewage tax. These taxes will have to be paid seperately.
