Congress stands in the way of BMC proposal to reduce property tax

Mar 19, 2015, 11:29 IST | Varun Singh

The proposal, which has to be passed by tomorrow in the Standing Committee, seeks to calculate tax based on carpet area; Congress claims they didn’t get enough time to read it

A Proposal that can bring relief to lakhs of Mumbaikars by reducing their property tax is in a race against time to get passed. But the Congress has decided to oppose the proposal in the BMC Standing Committee, saying they didn’t get time to read it.

Devendra Amberkar, Congress’ group leader in the BMC
Devendra Amberkar, Congress’ group leader in the BMC

The civic body calculates property tax taking into consideration the built-up area of your house. According to the fresh proposal, the civic body wants to now evaluate property tax based on carpet area which will reduce the tax you have to pay (see box).

The civic body expects to rake in Rs 3,984 crore in property tax this year (2014-15). If they stick to their old formula, they estimate the revenue next financial year (2015-16) will be Rs 5,077 crore an increase of R1,093 crore. The new formula, however, will only bring in an additional Rs 579 crore. This means Mumbaikars have to pay Rs 514 crore less going by the new formula.

Congress corporators, in the Standing Committee meeting yesterday, raised objections to the proposal, saying they had only gotten a copy of it in the morning and hadn’t got enough time to read it. But, Congress’ group leader, Devendra Amberkar, had already received a copy on Monday. He claimed he was busy fighting for his six corporators who have been suspended by the mayor and didn’t get time to study the document.

Trushna Vishwasrao, leader of the house, said if the Congress didn’t act on the proposal in time, citizens would have to pay more tax. It was later decided that the committee would meet again on it on Thursday (today). But, the party has decided to oppose the amendment; Aslam Shaikh, Congress MLA from Malad and observer for the party in BMC, said, “We in the Congress have decided to obstruct the proposal, as the tax is incremental and it will affect Mumbaikars.”

Congress says they won’t let anything that is against the people of Mumbai get passed. As per Amberkar, the BMC is expecting the total revenue from residential property tax to be 11 per cent according to the new formula. The Congress wants the civic body to reduce its collections from residential property, and, instead, levy a greater tax on commercial properties.

Section 128 of the Mumbai Municipal Corporation Act says the BMC can pass a new tax only on or before the 21st day of March. Since March 21 is a holiday, the new tax formula has to be okayed by March 20 (Friday). A senior BMC official said, “We are prepared to give the Congress a presentation on the new proposal. Whatever they want to do, they should do it by Thursday evening.”

Property tax formula
The BMC has, apart from reducing the area taken into consideration for the tax, also reduced the user factor (residential or commercial). While it was 1 in the older formula, the new proposal has reduced the user factor for residential buildings to 0.5, and the floor rise component has been entirely removed.

Old formula: Ready reckoner rate X user factor (1 for residential buildings) X (factor for type of construction) X (Age factor) X (built-up area of the flat) X (floor rise)

New formula: Ready reckoner rate X user factor (0.5 for residential buildings) X 1 (factor for type of construction) X 1 (Age factor) X (carpet area of the flat)

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