If the Bruhat Bengaluru Mahanagara Palike (BBMP) has its way, private educational institutions, marriage halls, private hospitals and private orphanages may soon have to pay property tax.
These institutions and properties are currently exempt from paying property tax to the civic body. They have to shell out only 25% service charge, as prescribed under Section 110 of the Karnataka Municipal Corporations (KMC) Act, 1976. BBMP Commissioner B.H. Anil Kumar, however, has written to the Urban Development Department (UDD) seeking an amendment to the relevant section of the KMC Act, so that property tax may be collected from these institutions and organisations.
When contacted, the civic chief confirmed the move and said a decision on seeking an amendment to the Act had, in fact, been taken by the BBMP council way back in June 2011. “Many of these educational institutions in the city charge huge sums as fees, apart from collecting capitation fees. The other organisations also have profit-oriented activities. The BBMP provides them services, such as motorable roads and waste management. Why should we not expect property tax from them? Why should they be exempted and pay just 25% as service charge?” he asked.
Senior officials in the BBMP’s Revenue Department said that after the BBMP council passed a resolution seeking amendment to the KMC Act, the proposal was sent to the government in August 2011. The UDD subsequently sought some clarifications on the issue. A detailed report and clarifications were sent to the government the same month, but no action was taken and the proposal was relegated to the back-burner.
Mr. Kumar said the civic body would now push for the amendment. However, neither he nor other officials have an idea of how much property tax could come the civic body’s way if the amendment is passed. At present, there are 19 lakh properties under the tax net. Only from 2005 has the civic body been collecting 25% service charge from all buildings exempted from paying property tax. “This is still in the proposal stage. The quantum of property tax will depend on the total area of the site, built-up area, and other criteria. Without any ground survey, it is difficult to quantify how much revenue can be generated by making these institutions and organisations pay property tax,” a source said.
