Pune based property tax system on cards
Dec 06, 2013
Source : The Times of India


NAGPUR: The Nagpur Municipal Corporation (NMC) is all set to implement Pune Municipal Corporation's (PMC's) ready reckoner plus rental-based system to calculate property tax. "There will be upper and lower ceilings on increase or decrease of tax. It will not increase beyond double the monthly rent prevailing in the market nor will it fall below 50% of this amount," said NMC's tax committee chairman Girish Deshmukh.

"At present, the tax is computed on the annual rateable value system. The general body had decided to replace this system in 2011. However, the new method was never adopted. Now, NMC will table the new tax proposal before the House in February. The general body's decision in 2011 on property tax calculation will be superseded," Deshmukh said.

He said that the new tax system will bring down other taxes like general water tax. Presently, this tax is 40% of the total property tax amount. In addition, NMC levies a separate water tax.

The civic body's present practice of charging property tax on annual letting value (ALV) has led to many disputes as old and big structures pay lesser amount than new and small constructions.

After a study tour to Pune a couple of months ago by a team of NMC officials and corporators, Deshmukh said that the NMC had decided to go in for the capital value-based system as it is a systematic and rational way to calculate property tax. "It has increased the property tax recovery of the PMC significantly and hence NMC should go for it," Deshmukh said.

Under the present system, first the maximum possible monthly rent of a property is calculated. Then it is multiplied by twelve to determine ALV. The property tax is a certain percentage of ALV depending on the type of property. This system has led to many disputes as old and big structures pay lesser amount than new and small constructions.

In the new system, the value - a percentage of which will be the property tax - will be based on actual value of the property. The figure will be based on the ready reckoner used for calculating stamp duty by the revenue department.

"It will be a people-friendly system and even citizens can calculate their own property tax. The capital value-based system will be upgraded every year. The current system to calculate property tax is discriminatory and attracts many complaints," Deshmukh said.

Under the MMC Act, the NMC will also repeal the old rules of CNC tax and frame new rules, Deshmukh said, adding NMC will also have to keep ready its tax structure for every financial year by February. The meeting also discussed to assign different persons for tax assessment and recovery works. The new system would increase tax collection by up to 200% and the civic body will be able to use the revenue for developmental purposes.

The state government is encouraging municipal bodies to implement the new taxation system which will entitle them to benefits under Jawaharlal Nehru National Urban Renewal Mission.

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