BENGALURU: Bruhat Bengaluru Mahanagara Palike (BBMP) will do away with the current practice of determining tax based on ‘zonal classification’ (A-E) under its limits, and will levy property tax based on the new ‘Guidance Value-based’ tax system, from April 1, 2024.
Under the new system, property tax will be calculated based on the property location, type of usage, amenities and infrastructure development.
This move is expected to drastically increase annual property tax paid by property owners. However, BBMP is arguing that it will not get any funds under the 15th Finance Commission until property tax is linked to guidance value. State municipalities, other than BBMP, are already collecting property tax based on guidance value.
According to officials, the existing tax system is not rational. Citing an example, the official said, “In one zone (one of five classifications from A to E), a property owner pays more tax on his house built on the same area, compared to an owner in a different zone. Hence the new system is proposed to bring uniformity in property taxation.”
BBMP revenue officials also said that under the proposed system, more revenue will be generated as there will be no scope for undervaluation of properties. He also recalled that the Palike was losing out on a huge chunk of revenue due to the undervaluation of properties by land mafia, while purchasing them.
Talking about the proposed tax system, Srikanth Narasimhan, president, of Bengaluru Navanirmana Party (BNP), said that under the old system, he was paying Rs 3,864 for his 1,660 sqft built-up area under ‘E’ zone, and under the new guidance value system, he will have to pay Rs 5,171. “The actual picture will emerge only after BBMP publishes the final notification after settlement of claims and objections on March 6,” said Narasimhan.
BBMP also fixed Rs 20,000 plus cess per annum on telecommunication towers, hoardings, billboards or electronic devices installed on buildings. Under the new system, tax will be increased at 5 per cent annually, from the next financial year. The new directive will rake in revenue, which can be used for development projects.
For more details or to send in objections, visit the BBMP revenue office or reach out to the BBMP revenue commissioner at spcomm.rev@bbmp.gov.in.