Mumbai: CM grants tax relief for homes under 500 sq.ft

In a move that is expected to benefit an estimated 8 lakh home owners in Mumbai, the Maharashtra government has taken a decision not to increase the property tax for those who own or occupy properties measuring upto 500 sq. ft or less.

The decision not to hike the tax was taken at a recent Cabinet meeting chaired by the CM Devendra Fadnavis and would be effective from April 1, 2015.
 
The move comes in the aftermath of a recent policy adopted by the Mumbai Municipal Corporation (MCGM) that proposed a massive 40 percent increase in property tax rates for homes with an area smaller than 500 sq.ft. If implemented the new policy was expected to have an adverse impact on lakhs of low-to-mid-income families in the city that live in cramped quarters and old tenements scattered across Mumbai. 

Earlier a BJP delegation had met the CM to discuss the issue wherein he is said to have agreed in principle to exempt such home owners from the hike in property tax and assured the party delegation that he would discuss the issue at the cabinet meeting and also issue an ordinance if required.

Making the announcement, the CM revealed that his government had decided to extend the exemption granted to such properties in 2010, when the Municipal Corporation of Greater Mumbai (MCGM) had shifted from a rateable tax to a capital-based tax structure and houses measuring upto 500 sq ft were given an exemption from any increase in property tax rates for a period of five years.

The CM further revealed that an ordinance would soon be promulgated to ratify the decision.

PCMC rakes in INR 3.39cr in a single day:

Even as the government mulls over the issue, in neighbouring Pune the property tax department of the Pimpri Chinchwad Municipal Corporation has set a new record by raking in INR 3.39cr in property taxes in a single day – the highest daily income in 2015-2016.

The unexpected windfall was credited to the success of a recent scheme announced by the PCMC which allowed citizens to pay their property tax at the 15 divisional offices of the department scattered all over the municipal limits between 10am and 4pm.

The decision resulted in large queues of people being seen at a majority of ward offices which in turn forced the authorities to open additional tax collection counters at its Thergaon, Chinchwad, Bhosari and Nigdi-Pradhikaran and Sangvi offices.

According to PCMC sources, a total of 60,066 people had paid their property taxes amounting to INR 49.53cr from April 1 to May 26 this year. The department had collected tax revenues amounting to approx INR 29cr till May 31 in 2014-15, amounting to a surplus of about INR 20.53cr in 2015-16 as compared to the same period last year.

Interestingly this bumper collection could be the result of a simple miscommunication, with civic officials pointing to a directive of the neighbouring Pune Municipal Corporation (PMC) advising property holders to pay their annual property tax in advance till May 31 to avail of various concessions, which was possibly misunderstood by property owners under the PCMC, whose actual deadline to pay property tax is June 30.