BENGALURU: In a relief to lakhs of property tax defaulters in the city, the state government on Thursday announced a ‘one time settlement’ (OTS) provision for payment of tax arrears with interest and penalty for tax evasion.
The government announced it in view of numerous complaints over indiscriminate imposition of huge penalties on tax defaulters and evaders. According to OTS, the penalty will be equivalent to the amount of tax evaded.
The government issued a notification giving immediate effect to OTS, which will be in force till July 31 or further orders. A penalty of 25% (on tax evaded) will be imposed on residential properties with tiled or sheet roofs (non-RCC) not exceeding 1,000 sqft for own use and having only the ground floor.
The government has given exemption to those living in sheds and houses in areas declared as slums by the Karnataka Slum Development Board or BBMP, those living in government houses for the poor, and in houses measuring less than 300 sqft for own use.
The notification stated that residential and mixed-use property owners will have to pay penalties (in cases of evasion) and interest (on arrears) for a maximum period of five years, irrespective of the default duration. However, no adjustments will be made for taxes that are already paid with penalties and interests.
The cabinet took a decision in this regard on February 15 in view of opposition from various quarters to the demand notices to pay the alleged evasion of tax with penalty and arrears of tax with interest, without taking into consideration whether the tax evasion was deliberate or due to lack of awareness of the self-assessment scheme.