Wednesday, January 28, 2009

Pay your property tax from Feb 1

Pay your property tax from Feb 1

Bangalore: The collection of property tax in areas coming under Bruhut Bangalore Mahanagara Palike will commence on February 1. The tax will be collected up to March 31 without any penalty, minister R Ashok said on Tuesday.
It was expected that BBMP would earn about Rs 560 crore from property tax and the 20 per cent hike effected by the government would not burden people, he said. Those paying property tax in full will get five per cent rebate, Ashok said.
In the recent legislature session held in Belgaum, the government brought in an amendment to the Municipal Corporation Act to facilitate introduction of self-assessment tax system under BBMP areas.
Ashok said government was contemplating not to regularize the property constructed on lake, tanks and government land and gomala (grazing land). Traders eager to pay property tax Will Help Them Claim Rebate On Income Tax S Kushala | TNN
Bangalore: Landlords in the city, especially commercial property owners and traders, are eagerly looking forward for the property tax collections to open up. They fear losing out on rebate in income tax returns, to be filed by March-end, if the government does not begin collections without further delay.
Property owners get 100% reduction under income from rentals in the income tax, provided they have paid property tax. Marchend is crucial, especially for traders and owners of commercial buildings, who stand to benefit more compared to residential building owners. They normally file IT returns by then.
After BBMP stopped collecting property tax for 2007-08, those who paid income tax in July could not claim rebate. “Normally, people file IT returns by July-end, but traders stretch it to March. The 100% rebate on property tax is a huge relief for us. Our main worry is BBMP not starting collection of the tax before we file our returns,’’ said B K Goyal, secretary, Federation of Trade Association of Central Bangalore.
The BBMP, on its part, hopes to start the collections and enable people to pay the taxes before March and claim rebate. “Since legislature has approved property rates as of 2000, we will issue final notification shortly and publish the rates and other changes in the law. A handbook will be published, after which property tax collections will open up in February,’’ a BBMP official said.
The legislature has given the go-ahead to collect tax for the year 2007-08 from February 1, and also to extend the deadline if necessary. Subsequently, after closure of the current financial year, BBMP will have to open tax collections for 2008-09 from April 1.
With the government deciding to stick to 2000 rates for property tax, BBMP is looking at untapped sectors to augment revenue. The authorities are banking on tax to be collected from unauthorized properties. The new rules provide for collection of taxes from such properties without any assurance of regularization. Also, certain new tax bases like on hoardings and telecommunication towers, though limited, will help bridge the gap in revenue. With the 2.5 times cap being removed, about 20-25% of the properties that enjoyed this concession will have to pay the same amount as applicable to others. The only concession property owners will get is the depreciation, the bandwidth of which has been increased to 60 years and beyond. It was earlier 55 years and above. How is deduction claimed?
Deduction in income tax returns can be claimed for rented buildings Owner-occupied premises don’t fall under this category Income (rent) from properties will have to be declared in IT returns Property tax receipt should be submitted to avail deduction
Why deduction?
Property tax is treated as investment, and hence a rebate is given Example: Your annual rental is Rs 30,000 and property tax paid is Rs 7,500, then you will be taxed only for Rs 22,500
Long way to go
Minister R Ashok has announced property tax collections will open on February 1. However, the following procedural requirements are yet to be completed: Waiting for a couple of directives from the government Issuing notification along with rates and other changes Uploading rates on website Printing 10 lakh booklets Delivering it to revenue offices


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