BHUBANESWAR: The Bhubaneswar Municipal Corporation (BMC) on Wednesday issued notice to around 40 house owners for renting out their property for commercial use and not paying holding tax for the same. The notice was issued by BMC Zonal Deputy Commissioner (North) Pramod Kumar Prusty. Irregularity in paying holding tax is punishable under Municipal Corporation Act.
BMC officials said holding tax is a primary source of revenue for the Corporation and is assessed regularly. During a review of holding tax collection in the City’s North Zone recently, it was found that some households, though using their residential property for rental or commercial purpose, are not disclosing the same and evading holding tax imposed on these two categories of establishments.
“The house owners have declared themselves as residential holding taxpayers but are using their property to run businesses like hotels and guest houses which is a violation of the law and is punishable under Municipal Act,” Prusty said. The 40 house owners also did not have trade licenses to run their businesses, he said.
Prusty said for 1,000 sq ft area, the holding tax per annum is `250 if it is used for residential purpose. However, the holding tax for the same area per annum is `24,000 if it is used for commercial purpose. The Corporation will collect this amount along with fine from the defaulters, he added.