Bengaluru’s civic body has reworked its property tax structure and is all set to introduce multiple policies to increase revenue streams through which it aims to raise ₹8,272.74 crore in 2024-25, the highest if this target is achieved.
This has reduced the share of grants by the State and Union Governments in the total civic budget outlay to 32.9%, down from 37% last year. The civic body will get ₹4,077.59 crore this year via grants from the State and Union Governments.
The focus of the budget is on consolidating the revenue base, and exploring new innovative options like premium FAR to increase revenue streams.
The new guidance value-based property tax structure will come into force on April 1, 2024. The civic body is hoping to rake in revenue through the One Time Settlement (OTS) under which interest will be waived off for arrears that are paid by July 31. The penalty has also been halved.
“This will benefit 15 lakh taxpayers. All these amendments are expected to bring in people who remained outside the tax net,” said Special Commissioner (Finance) Shivananda H. Kalakeri who presented the budget. BBMP expects to generate ₹322 crore from penalties and interest on property tax arrears this year.
The property tax target for 2024-25 is ₹4,470 crore, 26% higher than the revised estimates for 2023-24, but only marginally higher than the actual target set in the previous budget.
In 2023-24 budget, Bruhat Bengaluru Mahanagara Palike (BBMP) had set a target of ₹4,462.5 crore, but is estimated to achieve only 80% of that despite a special drive to collect property tax arrears and catch tax evaders. The target has now been revised to ₹3,535 crore.
In 2022-23 as well, BBMP had reached only 80% of its targeted property tax collection.
Ad policy, premium FAR to shore up revenue base
The civic body is looking to diversify its revenue base and is aiming to generate ₹1,500 crore from a new ad policy and selling Premium Floor Area Ratio (FAR) in Bengaluru.
A new BBMP Advertisement Policy through BBMP Advertisement Rules, 2024, will be promulgated soon, and is expected to generate ₹500 crore revenue in 2024-25. The policy, which will be on the lines of the Advertisement Policy of New Delhi Municipal Corporation that was upheld by the Supreme Court, will permit a rational, transparent and regulated system of commercial and self-advertisements.
BBMP has announced that an online portal will be developed to manage all advertisement related issues.
BBMP aims to mobilise ₹1,000 crore by selling Premium FAR across Bengaluru. An amendment to this effect to the Karnataka Town and Country Planning Act, 1961 was recently passed by the State Assembly. The civic body has assured citizens that it will develop an online exchange for Transferable Development Rights (TDRs) to facilitate sale and purchase of TDR online.
The civic body also intends to introduce BBMP Estate Management Rules 2024, to better manage and monetise its assets.
Khata regularisation scheme that never took off
Even as the civic budget estimates revenue from diverse new schemes and policies, a word of caution is in order, the revised estimates for 2023-24 reveal. BBMP had estimated a one-time revenue of ₹1,100 crore from Khata Regularisation Scheme — conversion of B khata to A khata after collecting a betterment charge and fine — in 2023-24, but the scheme never took off due to legal hurdles, punching a big hole in the budget estimates.
The civic body has not shown any revenue from the scheme for 2024-25.
