Property Tax may be hiked in Chennai

Chennai: It seems the Tamil Nadu government has it plan cut out to ‘tax’ people more in the coming days. After effecting steep increase in milk prices, bus fare and electricity charges, Chennaiites would wake up to yet another hike soon. If the City Corporation has its way, a hike in property tax to fund its various infrastructure projects would become a reality in next week’s Budget.

Taxing indeed!

According to certain section of the media, an increase in property tax along with allocation of additional fund for infrastructure development in expanded areas of the corporation and strengthening government-run educational institutions would top the agenda of the Corporation’s budget for 2012-13, which is likely to be presented on Monday.

Facing large-scale tax evasions by commercial buildings, the civic body began a survey to re-asses the commercial and residential buildings but it still doesn't have precise data on the tax collected from commercial buildings.

Property tax is the main source of income for the corporation, contributing Rs 365 crore in the last fiscal out of the total income of Rs 489 crore. A similar special drive in 2007 found that Rs 270 crore was being evaded by property owners since 2001.

The budget will be presented by Chairman of the standing committee on taxation and finance K Santhanam while Major Saidai S Duraisamy will make the opening remarks, said the report.

IT and MNCs to be taxed

Earlier, the Corporation has indicated that it would tax more on IT and multi-national companies, as it felt that they are making more profits than the local grocery stores - both come under the same tax bracket. 

Now, the budget is round the corner, these multi-national and IT firms in the city may have to shell out a higher amount as property tax from the next financial year. "How can a multi-national company and a local store pay the same rate for one square foot?" said Mayor Saidai S Duraisamy at a recent council meeting.

The taxes were last raised in 1998. A revamp in the gradation system and tax slabs is likely, TOI quoting an official having said.

"We are going to meet and discuss changes in the classification of buildings. IT parks and MNCs may be brought under a special category or a separate slab could be created for them," said a revenue officer. Corporation sources said it might require an amendment to the Corporation Council Act, but that it was subject to government approval. Presently, there are different tax slabs for commercial and residential properties and a separate slab for special commercial buildings. 

"Special commercial buildings, including movie theatres, marriage halls, lodges, hotels and restaurants, pay higher tax than normal commercial buildings," said the official.