Additional burden on property buyers as PMC hikes property tax

PUNE: The general body of the Pune Municipal Corporation today approved a 6% per cent increase in property tax, putting an additional burden on the citizens. The PMC is expecting to mop up additional revenue of Rs 40 crore from the increase in tax. The Maharashtra NavnirmanSena joined hands with its rival Nationalist Congress Party to clear the tax hike proposal.

The civic administration had earlier proposed an 8% hike in property tax for 2013-2014 and forwarded the proposal to the standing committee. The committee reduced the hike by 2% during its meeting last month.
The proposal by the civic administration states: “It is necessary to increase the revenue from taxes and other sources, considering the cost escalation in developmental projects and expenditure on providing civic amenities, especially projects related to water supply and sewage treatment.”

In the general body the proposal was opposed by leaders of the BJP, Shiv Sena and the Congress. But the MNS and the NCP supported the increase, leading to a voting on the issue. Total 66 corporators voted in favour of the proposal, while 49 opposed the hike.

“The 6% hike is minimum and the citizens will not be burdened too much by it,” said Subhash Jagtap, NCP leader and leader of the house in PMC. “There has been no hike in the tax structure for the past four years. There is a need for revenue to carry out developmental works. So, we are supporting the tax increase,” said Vasant More, leader of the MNS in the PMC.

Arvind Shinde, Congress party leader in the PMC, said: “Many people have not paid their tax. The administration should take steps to increase the revenue collection through efficient recovery of tax instead of increasing the tax rate.”

Property tax is one of the main sources of revenue for the PMC. The tax department handles the billing and collection of property tax on residential and commercial, plots and other types of properties – held privately or by the government (state and Centre) – within the PMC limits.

Property tax is charged on immovable or tangible real property, such as land, buildings and permanent improvements. Based on assessments, property holders are expected to pay the tax. The PMC assesses the residential and commercial properties in the city. Property tax may also include basic house/building tax plus service taxes such as street tax and conservancy/scavenging tax. It is collected either half-yearly or annually.
There are around six lakh residential properties, 75,000 non-residential properties and around 24,000 open plots. The PMC offers discount to property owners who pay tax before May 31.

As per section 99 of the Bombay Provincial Municipal Corporation ( BPMC) Act, 1949, the civic body finalizes the rates of taxes every year and puts up the proposal before the standing committee. If the standing committee approves the proposal, it becomes part of the municipal commissioner’s annual civic budget and the standing committee’s budget. The general body must approve the new tax rates before February 20 each year.