BBMP Budget | No hike in property tax

Target collection reduced ₹2,800 crore for the coming fiscal year

Updated - March 28, 2021 11:10 am IST

Published - March 27, 2021 08:05 pm IST - Bengaluru

In what may come as a relief to citizens, the Budget does not mention any increase in property tax for the coming financial year. Bruhat Bengaluru Mahanagara Palike Special Commissioner (Finance) Tulasi Maddineni announced that the civic body will move towards implementing property tax based on the Capital Value System. Owners will pay tax-based on the capital value of the property. However, with the system not yet in place, it seems unlikely that it will be implemented in the coming financial year.

Though the BBMP plans to recover dues from 4.1 lakh properties whose owners have wrongfully assessed their property tax this year, the target collection has been reduced from ₹3,500 crore (2020-21) to ₹2,800 crore (2021-22).

This, even though the civic body has reportedly managed to collect nearly ₹3,000 crore as property tax this current fiscal. Stating that there were no plans to increase property tax, the Budget said the achievable target of ₹2,800 crore has been set, which, with various cesses will add up to ₹3,500 crore.

The non-profit organisation, Janaagraha, in a statement, stated that the target of ₹2,800 crore property tax collection is 40% more than the maximum amount of tax collected t0 date.

Stressing on the need for better enforcement to bring unassessed properties into the tax net and correction of zonal misclassification, civic commissioner N. Manjunath Prasad said that 78,000 notices had been issued.

Capital Value System of tax assessment

The civic body plans to shift to the Capital Value System of tax assessment from the current rental based system. BBMP is the only urban local body in the State that has yet to make this shift. However, it is not clear when the CVS will be implemented.

BBMP Administrator Gaurav Gupta said that the BBMP needed a legal basis to implement the system from the next fiscal – April 1, 2021. Senior officials, on condition of anonymity, told The Hindu that they would require at least another six months to put in place all the processes.

“We will then have six more months to create awareness among citizens about the new taxation system,” officials said, stating indirectly that the implementation would be unlikely in the coming fiscal.

Conversion of B khatas to A khatas

The Budget, once again, makes a case for conversion of B khatas to A khatas. Certain legislative changes are required to convert B khatas into A khatas and a proposal regarding the same is pending with the government.

“This is in the final stages and is likely to be approved. Once approved, it will make way for a more transparent system and result in orderly growth in the city,” said Mr. Prasad.

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