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    Kolkata civic body to follow twin systems for property tax calculation

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    Kolkata Municipal Corporation

    The Kolkata Municipal Corporation (KMC) has decided to embrace the property tax model of New Delhi Municipal Corporation that has both rent-based valuation and unit area assessment running in parallel, giving house owners the option to either stay on with the former or shift to the latter.

    The KMC decision was prompted by a fall in property tax collection since the UAA was introduced. Though a section of house owners shifted to UAA and another paid the dues according to the rent-based valuation, many have done neither, leading to a sharp decline in property tax collection.

    A revenue department official said the poor response of property owners even two years after the UAA had been rolled out had forced the assessment department to shelve any thoughts of scrapping the previous rent-based valuation system.

    “We could not do away with the rent-based valuation for determining property tax as that would have led to an even greater revenue loss. We have extended the deadline for UAA thrice since 2017. But even that hasn’t improved the situation. Barely 10% of property owners have moved to UAA till date,” said a KMC assessment department official.Last year, revenue collection from property tax was down 20% with few applying for UAA. Ultimately, it was the payment of arrears by a central government organization that saw the KMC bridge the huge tax gap. It was only after this experience that KMC decided to dispatch tax bills computed according to the rent-based valuation system.

    The proposal to keep both methods of property tax computation alive was given by a team of officials who visited various cities to see how UAA had been implemented there. “We identified Delhi as the model as civic authorities there had also struggled in the initial years of UAA. They did not scrap the old system of property tax valuation,” an assessment department official said.

    Meanwhile, officials have been trying to adopt several measures to popularize UAA and encourage its acceptance. “We have already made the self-declaration form for the property tax payers simpler to reduce confusion while providing details on the property. Next, we will make changes in a couple of parameters to reduce the tax burden,” a revenue official added.

    Info- https://realty.economictimes

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