Property tax rates in capital all set to rise from April 2010

Property tax rates in the capital are all set to rise from April 2010. After rejecting the proposal for introducing professional tax, Municipal Corporation of Delhi’s (MCD) standing committee on Monday cleared the proposal to hike property tax.

However, for residential properties, rather than the 5% increase for categories A to H, as proposed by the MCD commissioner earlier, MCD’s standing committee has proposed a hike of 2% for categories A and B, 3% in categories C and D. The maximum increase in property tax rate has been proposed for category E where the tax rate will increase from 6% to 12%. While in category F and H, the increase will be 1%.

The entire MCD area has been divided into eight categories from A to H, wherein category A stands for upscale colonies. ‘‘To crack down on tax defaulters, the civic agency is planning to carry out a survey. Our teachers and engineers will carry out the survey. We are also exploring the possibility of hiring ex-servicemen to carry out the survey and plan to pay them Rs 30 per household visit. We will complete the survey within three months. The data received by Survey of India was found to be inadequate to meet our requirements,’’ said Singhal.

A host of new taxes have also been proposed to augment the dwindling revenues of the civic agency. The standing committee members also gave their approval to the proposed hike in tax levied on self-owned ‘luxury commercial properties’ from 10% to 15%. These ‘luxury commercial properties’ include starred hotels, malls, airconditioned gyms, swimming pools and clubs.

For non-residential properties , the proposed property hike is from 10% to 15% in 2010-11 in category A and B, from 10% to 13% in category C, D and E and from 10% to 12% in category F, G and H.

Tax will be hiked from 10% to 15% for farmhouses used for residential purpose while it will increased from 15% to 20% for those that are used for non-residential purpose.

Public school buildings, pre-schools or nursery schools will have to pay 12% tax in place of 10%. MCD has also announced that all aided schools in the capital will be granted a rebate of 90% on the total property tax payable, provided that these schools make the total payment in a single installment during the first quarter of the financial year (April-June ).

The Hikes

The standing committee has proposed a hike in the property tax rates for all residential properties in A to H categories. Self-owned luxury commercial properties will be charged 15%. Luxury commercial properties, starred hotels, malls, air-conditioned gyms and clubs besides others, are charged 10% now Banquet halls and community halls will also have to pay an annual registration fee, ranging from Rs 20,000 to Rs 1 lakh A licence fee of Rs 100 for each animal being brought into Delhi has been proposed. A 5% tax will be levied on private companies (not discoms) generating power.