Hiding property info? Face checks, pay fine

Hiding property info? Face checks, pay fine
Revenue Officials Can Now Come Calling
S Kushala | TNN

Bangalore: Property owners, it’s time to come clean. Revenue inspectors can come knocking on your door if you make false declarations. You could end up paying hefty penalty.
False declarations include renting out your property but claiming 50% tax benefit under ‘owner-occupied category’. There could be a problem, too, if your tax returns don’t reflect additional construction made in the past eight years.
The Karnataka Municipal Corporations (Amendment) Ordinance, 2008, has empowered BBMP officials to cross-check tax returns by inspecting the property, reassess the building and recover the difference in tax amount with a hefty penalty. The government has laid down strict rules and set the format to conduct inspections. The goal: avoiding corruption.
From this taxation year, a random scrutiny of 15 per cent of the returns filed will be made, followed by inspection of property after issuing notices. The properties will be randomly selected by a computer. This list will be published and put up on the BBMP website and notice board. BBMP offices will send notices mentioning the date and time of inspection.
Is this the return of Inspector Raj? No, say BBMP officials. “Property inspection by revenue officials can give room to corruption. To avoid this, we have a process where the property owner can appeal to the commissioner about any lapse. Also, an appeal can be made if the tax reassessed is not found as per the rates prescribed,’’ they explain.
Since SAS was introduced in 2000, the BBMP has found large-scale errors in tax returns. Over the years, owners changed their declarations from tenant-occupied to owner-occupied to avail of the 50% concession.
In other cases of discrepancies, tax was not declared for additional builtup area. The erring owners were confident BBMP could not nail them as officials were not empowered to inspect property.
Besides, excess depreciation claims, wrong zones and calculation errors were found in abundance in the returns. “The old SAS did have a scheme of 5% random inspection, but was given up as the council decided to encourage the scheme of self-declaration and did not want BBMP staff to conduct surprise inspections. As a result, tax collection, instead of increasing, began to dip,’’ officials say.
Considering the actual tax potential in the BMP areas, the estimated tax collection from 2000 should have gone up by 20-30% each year since there was a construction boom between 2000 and 2008. But records show an increase of just 5% in annual tax collection.
THE FINE PRINT
THE RULEBOOK - Karnataka Municipal Corporations (Amendment) Ordinance, 2008
For the purpose of random scrutiny, an official may enter, inspect, survey or measure any land or building after giving notice to owner/occupier, who is bound to furnish necessary information
Due regard shall be paid to social and religious customs of occupiers during inspection
No apartment occupied by a woman shall be entered until she has been informed; she is at liberty to refuse
Upon random scrutiny, if an authorized officer finds incorrect returns resulting in evasion of property tax, he may reassess property as per rules
PENALTY
If tax reassessed is more than 5% of the tax originally assessed, the owner has to pay a penalty not less than twice the tax so evaded along with interest for the difference at 24% per annum
IF OWNER WANTS TO CONTEST
Owner or occupier may either accept property tax assessed and penalty levied or send objections to the commissioner within 30 days
The commissioner will consider objections and pass orders either confirming or revising such assessment