Greater Bangalore, but higher tax?

Greater Bangalore, but higher tax?

The Hindu

Several issues to be tackled before finalising property tax system

# Sources say Annual rental value, capital value-based systems followed now
# Existing methods will continue till March 31

BANGALORE: With the Government having issued the final notification on the formation of Bruhat Bangalore Mahanagara Palike (BBMP) on Tuesday, citizens are worried that they will have to pay more property tax.

Residents of the seven City Municipal Councils (CMCs) and the one Town Municipal Council (TMC) are now paying property tax under the capital value-based system (CVS) and those in the 100 wards of erstwhile BMP are paying it under the annual rental value (ARV) system. While both these systems run on the principle of Self Assessment Scheme (SAS), the basis on which the tax is calculated is different.

Sources in the Housing and Urban Development (HUD) Department told The Hindu on Wednesday that the existing method of taxation would continue in the respective areas till March 31.

"After that, a uniform taxation system will be worked out for all the areas under the BBMP," they said.

Although the erstwhile BMP has had several discussions on evolving a proper taxation system for the entire BBMP area, the officials have so far not been able to arrive at a consensus.

Pros and cons

"We weighed the pros and cons of both the systems and found that there are several issues that need to be tackled before finalising the property tax system. While the residents of CMCs are happy paying tax under CVS, those in the existing 100 wards are comfortable with the ARV," said an official who is a member of the committee on organisational restructuring and staff recruitment for BBMP.

The Government had a few years ago modified the Karnataka Municipalities and Certain Other Law (Amendment) Act, making it mandatory for all municipalities and corporations in the State to fix the rates under the CVS at 50 per cent of the guidance value of a property. But the BMP wanted the Government to increase the tax rates for areas in its jurisdiction, as the market value of property here is high. So it had not introduced CVS so far.

"Whether it will be CVS or ARV for all the areas is something that has to be decided after mature deliberations," the official said.

Although the draft notification proposed inclusion of seven CMCs, one TMC and 111 villages in BBMP, the two villages of Vaderapura and Kanooru have now been excluded as they fall in the "green belt." The village of Talaghattapura in Kanakapura has been added.

While BMP Commissioner K. Jairaj and Administrator Dilip Rau would continue to head the larger body, the existing commissioners of the urban local bodies would continue as special officials of the BBMP in the five zones created under the BBMP, the sources said.

Following the notification, all BMP communications have been changed. Sources said the civic body was also changing all BMP boards and names plates into BBMP.