Sulakshana J. (name changed), a resident of Madiwala, was surprised to receive a notice from the Bruhat Bengaluru Mahanagara Palike (BBMP) asking her to pay an additional ₹50,000 towards property tax. “I have been paying property tax diligently every year. The notice claims there is a mismatch in the tax zone classification. The ₹50,000 includes the difference in tax, penalty, and interest for four years,” she said.
Several citizens across the city have received similar notices. The notices simply state that the tax zone reclassification was done in 2016-17 and that citizens now have to pay penalty and interest for not updating the records before paying property tax under the Self-Assessment Scheme (SAS).
Many citizens, including Ms. Sulakshana, have pointed out that the BBMP had failed to inform them of the change in tax zone, while civic officials plainly state that a gazette notification had been issued in 2016 itself.
Prakash D.R., a property tax expert and president of Osborne Road Area Residents’ Welfare Association, blamed the BBMP for the confusion. He pointed out that the zonal reclassification was withdrawn in April 2016, which meant that the 2008 classification was still effective. “The property tax payment portal mentioned nothing about the zonal reclassification. How can property owners who have been paying correctly for 15 years (since SAS was introduced) go wrong in 2016-17?” he asked, demanding that the BBMP withdraw all the notices issued to property owners who have been diligently paying tax.
Revenue officials admit that the issue of demand notices has resulted in a lot of confusion. An official in the South zone, on condition of anonymity, said that every day, at least 10 citizens now visit the civic office seeking some clarity on the issue. The official said that the zonal reclassification had now been corrected on the property tax portal and blocked to ensure it could not be altered.
More revenue
According to a senior revenue official, over 78,500 demand notices had been issued, which would bring in revenue of more than ₹360 crore to the civic body, including ₹120 crore in property tax and ₹240 crore in penalties and interest. “Already, around 8,000 citizens have paid ₹14 crore in dues,” the official said.
The official admitted that the civic body was also partly to blame for not updating the property tax software to reflect the zonal reclassification effected. However, the official added that the onus was also on citizens to check if there was any change in the tax zones, given that a gazette notification was published in 2016. “While paying income tax, citizens check for the tax slabs and then make payment. Such due diligence should have been done for property tax as well,” the official maintained.
Many citizens have now approached the BBMP seeking exemption of penalty and interest, while agreeing to pay the difference in tax to be paid. “No decision has been taken yet. We will discuss with the Chief Commissioner and Administrator,” the official said.
Meanwhile, the Bengaluru NavaNirmana Party (BNP) has started an online petition pointing out to the Chief Minister the BBMP’s “unreasonable move”. Srikanth Narasimhan, co-founder and general secretary of BNP, said the majority of citizens were unaware of the changes in tax zones. There was no alert on the payment portal about the change, and there was no provision to change the details. “Why did the BBMP wait for so long to issue notice to owners who have been accused of underpayment?” he asked.
The BNP, in its petition, has demanded withdrawal of the notices issued and waiver of arrears, apart from the implementation of the zonal reclassification from the next fiscal after giving it wide publicity and automatic classification of the zones for properties that have been geotagged.
