Mumbai: BMC to bring in transparent property tax rules soon

Updated: Feb 06, 2020, 07:43 IST | Chetna Sadadekar | Mumbai

Civic body aims to make new reforms more citizen-friendly, citing several loopholes in the current tax system.

The reforms are being drafted and the new rules will be presented to the committee for approval before being implemented. Pic/Istock
The reforms are being drafted and the new rules will be presented to the committee for approval before being implemented. Pic/Istock

The Brihanmumbai Municipal Corporation (BMC) has set up a committee to reform the norms under which property taxes are charged. The BMC officials said the new rules will be to ensure maximum recovery of bills from citizens, unlike the current system where the outstanding amount increases every year.

The civic body is aiming to make the new reforms more citizen-friendly, as the current taxable system is under litigation for years and the BMC hasn't been able to recover the money. Currently, dues worth R15,000 crore are outstanding and about 70 per cent of this amount is pending, following the Capital Value system.

According to officials, BMC's property tax collection rules change every five years. But, since the last decade, the property tax is being challenged owing to various reasons such as — houses below 500 square feet were charged differently earlier, while some claimed that use of Capital Value System was wrong which saw citizens approaching the court.

While there is no clarity on increase in property tax amount in the 2020-2021 budget, BMC commissioner Praveen Pardeshi said the forthcoming slabs of 2020-21 to 2025-26, will have reformed property tax rules.

Currently, the reforms are being drafted and the new rules will be presented to the committee for approval before being implemented.

"The committee is still working on the reforms and studying the loopholes in the past rules. The aim is to avoid any repetition of previous experiences which were challenged in court. There is a discrepancy in collecting the taxes, which we are trying to abolish and streamline," a civic official requesting anonymity said.

However, even as the reforms are being drafted the BMC is still not sure about the 500 sq feet and below properties. Even though Shiv Sena has been boasting about waiving the tax for such residents, the BMC is planning to waive off the general tax component, which is just 30 per cent and thus the residents of such properties will have to bear the remaining 70 per cent.

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