Tuesday, December 30, 2008

Not-so-harsh draft SAS unveiled

Not-so-harsh draft SAS unveiled

20% cap on increase in property tax over last year's mooted, education cess scrapped

The city has now been divided into seven zones. Each zone has its notional rental value to assess property tax

Basavaraj Itnaal. Banagalore
A cabinet subcommittee headed by transport minister R Ashok met on Monday and finalised the guidelines for the modified self assessment system (SAS) of property tax evaluation to be implemented in the state.
The modified SAS now goes to the cabinet for approval. The subcommittee decided to re-classify Greater Bangalore into six zones for valuation purposes, apart from designating 110 villages which were added to BBMP as a separate zone.
The re-classification was necessary as BBMP now includes about 520 sq km of new area. The valuation zones would be named A to F and guidance values for computation of tax are fixed.
The new SAS uses Unit Area Value (UAV) method. UAV fixes a notional monthly rental value (MRV) of your property depending on which of the six zones it is located. Using the UAV, the owners of property need to file self declaration of property tax.
The MRV will be different for residential and commercial properties in any zone. The MRVs have not yet been announced. But MRVs are capped by the 20% ceiling announced on Monday.
While there is no rebate for rented properties, self-occupied properties get a 50% rebate in the assessed tax.
In 2006 when Greater Bangalore was formed by merging eight local bodies on the outskirts of the city, 110 villages too came into BBMP fold.
Ashok said bringing property tax rate here on par with that of the city would be hard on residents.
He said a special rate which is lighter on villagers would be announced.
"It is unfair for us to make villagers pay high taxes when we are yet to provide better infrastructure to them," he said. The earlier avatar of SAS had mentioned a slab of 250% on the increase. That is if you had paid a property tax of Rs 100 in 2005, it could not go beyond Rs 350 in 2006.
But Ashok said this slab would go in the modified SAS. On the other hand, he said in no case one would pay tax higher by 20% over last tax paid. When asked to clarify, the minister said that 250% ceiling would be removed only in case of wrong declarations. Ashok told that the cess on property tax has been reduced to 24% from the earlier 34%.
He said no education cess would be collected. Further, if your property fell in a new zone after re-classification, it would not go more than one notch up. That is if your property belonged to zone D earlier, it can only appreciate to C and not B or A.


Post a Comment

<< Home