The city’s civic body has now proposed to the State government to let go of the penalty and the interest on property tax arrears notices it has issued for wrong classification of tax zones since the last five years. But, it insists that property owners should pay the property tax arrears.
The Bruhat Bengaluru Mahanagara Palike (BBMP) over the last few months issued over 78,500 tax notices to property owners for not updating their tax zones in 2016-17, when a new classification was notified. Notices asked property owners to pay tax arrears, interest, and penalty for the five years since. BBMP expected to mop up revenues of ₹360 crore: ₹120 crore in tax arrears and ₹240 crore in penalty and interest.
Several had objected to this, arguing that the civic body is also at fault for not reflecting changes in the property tax portal, not publicising the changes enough in 2016, and waking up now after five years, which many civic officials concede too. As an acknowledgement of its faults, BBMP now proposes to let go of the penalty and the interest, but expects property owners to pay tax arrears of ₹120 crore.
“The State government must take a final call on the issue. The ball is now in the Chief Minister’s court, who also holds the Finance and Bengaluru Development portfolios,” a senior official said. A decision in this regard is expected to be taken next week, he added.
The Bengaluru NavaNirmana Party (BNP), which has taken up a campaign in this regard and petitioned the Chief Minister on Monday, demanded a complete waiver of tax arrears too.
Holding the BBMP responsible for the confusion and chaos, the BNP has demanded all tax notices be immediately withdrawn and the new classification of tax zones be implemented from the next financial year after wide publicity.
The BNP has also threatened to hold multiple demonstrations across the city on August 28, if their demands are not met by then.
However, civic officials said that the new tax zones have already been in effect from 2016-17 and lakhs of property owners have been paying their taxes as per the new zonal classification for five years now and waiving tax arrears for the 78,500, who did not update their zones, would be unfair to other tax payers.
“The BBMP is also at fault which we concede by proposing to let go penalty and interest. But the property owners are also at fault. They will have to pay the tax arrears,” a senior official argued.