The Brihanmumbai Municipal Corporation (BMC) is likely to absolve the general tax component of the property tax of residential properties. This will be applicable for resident properties measuring up to 500 square ft in Mumbai.
According to a report published in The Indian Express, the officials have informed that the general tax constitutes about 10 to 30 per cent of the total amount and it will be the only component which will be exempted.
The property tax comprises of eight components including general tax, water tax, education cess, tress cess, sewerage tax and water benefit tax among others. Sunil Dhamne, Joint Municipal Commissioner (Assessment), said that no other component but general tax will be exempted.
This decision has been taken after taking advice from the law department. The BMC decided to absolve the general tax component of the property tax a year after the bill was introduced by then Devendra Fadnavis government.
The previous government had cleared the bill to exempt the property tax of residential properties but the component of the tax which was to be waived remained undecided. Due to lack of clarity, the BMC didn't issue tax bills to residential properties measuring up to 500 square fr in Mumbai.
An estimate suggests that if the civic body provides a waiver for all the components of the property tax to residential properties of 500 sq ft, it will lose a huge amount of revenue - annually around ₹350 crores.
The property tax is one of the biggest revenue sources for the BMC. It amounts to nearly 24 per cent and its collection has reduced since 2016-17. Earlier, the Fadnavis government had decided to waive the property tax in order to woo middle-class voters.
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