Property tax scheme to benefit ‘rented homes’

The new tax formula for calculation of property taxes in Ahmedabad Municipal Corporation will be effective from April. The bills as per the new tax scheme will be disbursed by August.

The mayor, Himmatsingh Patel, said that the corporation has also decided to do away with the 18 per cent penalty tax not paid. The new tax scheme that was announced earlier will be the most beneficial to the housed that are rented out.
Explaining this, captain D.J. Mahajan of the tax assessment and collection department, said that earlier the rent on which the tax was based was done on an arbitrary base, on the judgment of the tax assessment officer about the "likely" rent of the premises.

This made an impractical situation that bred corruption. In the new scheme, the base for the tax in tenant houses too has been fixed. As per the new scheme, the tax base will be the market value of the land as per the stamp duty register.
The city will be divided in four zones and different tax criteria will be fixed. The whole scheme will be formulated in form of rules and available for public by May. The main benefits of the scheme are to increase the tax base and induce discipline in the tax-collection system.

While the basic tax rates are Rs 10 for residential (the BPMC Act has said that the tax can range between Rs 10 and Rs 20) and Rs 22 for commercial (it can be between Rs 20 and Rs 40), the equanimity in the tax structure is ingrained in the way different multiples are given for differently aged houses in different areas.

Republished from Asian Age