After setting an ambitious target, property tax collection has fallen woefully short. The Bruhat Bengaluru Mahanagara Palike (BBMP) had collected only around 63% of the target set in the 2017-18 budget.
In fact, the previous financial year’s collection is a steep fall from the previous two fiscals (2015-16 and 2016-17), where the civic body was able to meet around 73% of the target.
The budget estimates had set a target of ₹2,600 crore for property tax, excluding various cesses, but the civic body has managed to collect only ₹1,655 crore. This is probably the first time in the last five years that property tax collection has dipped in absolute numbers as well. Including various cesses (24% over the property tax), the civic body has collected ₹2,177.83 crore, Venkatachalapathy, Joint Commissioner (Revenue) said on Monday.
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Officials said election-related duties were the reason for the fall. “In the last three months, the entire Revenue Department has been busy with electoral rolls revision and that has definitely affected property tax collection in the last quarter,” Mr. Venkatachalapathy said.
Tax base widens, tax decreases
Ironically, property tax collection dipped when the number of properties that paid tax saw an increase of over a lakh. GIS mapping of the city has identified around 19 lakh buildings, of which only over 13 lakh properties had paid property tax in 2016-17. This has increased to 14.4 lakh properties in 2017-18, an increase of 1.4 lakh properties.
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A senior councillor said that the property tax collection data for 2016-17 included nearly ₹300 crore of arrears of property tax from previous years that was collected during that fiscal, which pushed up the numbers.
The civic body missing the budget target for property tax by a huge margin has emerged as a big concern as the budget target for the 2018-19 fiscal is pegged at ₹2,675 crore, which is ₹1,020 crore higher than what the civic body has collected this year. Several senior councillors expressed doubts whether the civic body will be able to meet the target.
However, Mr. Venkatachalapathy said the BBMP had raised tax demand for ₹350 – ₹400 crore as a result of the ‘Total Station Survey’ (re-survey of carpet area of large properties) during 2017-18, most of which is now stuck in litigation in courts. “We will resolve most of the cases this year and this will add to the tax collection,” he said.
5% rebate till April 30
Tax payers who pay their full property tax before April 30 will get a rebate of 5%, Venkatachalapathy, Joint Commissioner (Revenue) said. Tax-payers can either pay property tax through challans from four empanelled banks or online.
Canara Bank, HDFC Bank, Axis Bank and ICICI Bank are the four empanelled banks where tax-payers can avail challans and pay property tax. BBMP officials said over 73% of the tax collected in 2017-18 was paid through challans. For online transactions below 5,000, no additional transaction charge will be levied, he added.
Ex-servicemen still from running pillar to post
The civic budget of 2018-19 recommends complete waiver of property tax for ex-servicemen, who presently enjoy a 50% rebate. But ex-servicemen alleged that BBMP has failed to implement the scheme.
“There is no provision for ex-servicemen to pay 50% of property tax on the BBMP website. We are compelled to pay the full tax as Form VI (used to avail the rebate physically) does not appear as first choice for ex-servicemen,” said Wg. Cdr. G.B. Athri (retd.), who has been paying the full tax from 2012-13 onwards due to the anomaly.
Several ex-servicemen have been running from pillar to post to get a refund of the 50% rebate. “50% of the property taxes paid from 2012-13 onwards needs to be refunded or adjusted for subsequent years for all ex-servicemen,” Mr. Athri said. However, he said, despite several letters, reminders and even personal meetings with the BBMP, the issue has not been addressed. “BBMP pays lip service to ex-servicemen, but has failed miserably to facilitate the community,” he said.
When quizzed over the issue, Mr. Venkatachalapathy assured that he will resolve the issue soon.