In Mumbai, property tax will be levied on slums wef April’16

From DNA

Mumbai: From April this year, the Brihanmumbai Municipal Corporation (BMC) will start levying property tax on all slums. However, Shiv Sena and BJP have decided not to discuss or deliberate on the proposal tabled by the civic body on Tuesday, keeping an eye on the civic elections in February 2017.

To be implemented on the lines of Ahmedabad, the civic body has decided to charge a lump sum on slum dwellers as property tax but not the capital value-based charges, which are slapped on other properties.

Mahesh Parkar, chairman of law committee of the BMC, said that there was no clarity in the proposal as to why the slum dwellers would be charged even when BMC is not giving any services. “Is the civic body planning to impose the tax on the post 2000 slums too, or what is the datum line followed by administration? We have asked officials to come with the proposal in the next meeting with all the details,” said Parkar.
According to civic officials, till 2006-07 the BMC used to charge property tax on authorised slum dwellers in the form of service charges. Accordingly, Rs.100 and Rs.250 were collected from residential and commercial slum dwellers respectively.

Though city slums are presently not charged any taxes by the civic body, the civic chief in his budgetary speech for 2015-16 had hinted at charging property tax on slum dwellers.

“Octroi is the biggest source of revenue for BMC. However, as it is likely to be abolished in near future, the civic body needs to find new sources of revenue. Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) guidelines too it is necessary to charge taxes on maximum properties. Due to this, slums existing on government and private land needs to be charged with property tax,” said a senior civic official.

In Mumbai, more than 50 per cent population resides in slums. The BMC had appointed a committee under financial expert Abhay Pethe to study the assessment and collection of taxes from slums.

“The civic body has started implementation of the capital value-based property tax system, which is based on ready reckoner rates from April 2010. However, taking into account the high rates of ready reckoner, it will be a huge burden on slum dwellers. Hence, it has been decided to charge a lump sum amount as property tax on them. After getting the approval from civic law committee, the proposal will be sent to the state government for approval,” said Sanjay Kabre, assistant municipal commissioner (assessment and collection).
The charges
Annual lump sum property tax charges on slums will be anywhere between Rs.2,400 to Rs.5,400 for 125 sqft to 250 sqft and above. Similarly, for non-residential slums, the proposed property tax will be charged from Rs4,800 to Rs.13,500 as per the slabs decided between 125 sq ft and 1,000 sq ft. Those slums with floors above will have to pay additional charges.

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