South Delhi civic body proposes 2-5% hike in property tax rates

NEW DELHI: Facing a severe revenue crunch due to the ongoing pandemic, South Delhi Municipal Corporation’s executive wing has proposed an increase in the property tax rates by 2-5% for residential properties. Adopting various fiscal tightening measures, SDMC also plans to reduce the quantum of property tax rebates it gives to various categories of beneficiaries.

With the municipal commissioner unwell, the additional commissioner presented d the annual budget on his behalf on Monday. Instead of the regular annual increase, the corporation has proposed to reduce its budgetary estimate projections by around Rs 482 crore. In comparison to a proposed expenditure of Rs 5316.68 crore in the preceding year, the civic body has moved a budget worth Rs 4833.79 cr for 2021-22.

The additional commissioner said the civic body proposes to move from three property tax slabs to just two. In case of residential properties, houses located in the A-B category colonies may have to pay an increased 14% tax while those in C-H colonies could pay 12%. A senior corporation official explained that under the current three-slab system, A-B categories pay 12%; C-E categories 11%; and F-H categories 7%.

For a 100 sq m property in a B category colony, the change will lead to the annual tax increasing from Rs 6000 to Rs 7000 while for a G category 100 sqm house, the change will cause the annual tax to increase from Rs 1400 to Rs 2400. Categories C, D and E, which are in the middle, will see the least change (only about 1%). Hence, a similarly sized D category house will witness an increase from Rs 4400 to Rs 4800, an official explained.

Similarly, in the case of commercial properties, a 2-3% tax rate hike has been proposed. Under the proposed system, properties in the A-D categories will pay 15% tax while E-H categories may have to shell out at a rate of 12%. The prevailing three categories pay at the following rates: A-B 15%; C-E 12% and F-H 10% tax rate. The budgetary proposals state that properties in industrial areas which have been converted to commercial and the commercial properties of DMRC will be charged at a 20% tax rate.

Also, if the proposals are accepted, the quantum of rebate for early payment of property tax will be reduced from 15% to 10%; the rebate for senior citizens, women and physically handicapped people will be reduced from 30% to 20%; and the 20% rebate provided for cumulative filing by co-operative groups housing societies will be abolished. The tax department also wants to restrict the rebate provided to rural areas to properties with an area of less than 100 sqm. The budget states that the 1% annual education cess will continue in the next financial year.

The municipal body has announced that it will undertake several e-governance projects by starting digitization, online portals and mobile applications to expand its online services in the coming months. Around 25.29% of the budgetary resources have been dedicated to sanitation.

The corporation also plans to start a veterinary hospital in Vasant Kunj for treatment of birds and animals and issuance of radium collars for sterilized stray dogs so that unsterilized dogs can be easily identified. Several old projects have also been recycled with a promise to ensure completion this year. These include work on a new engineered landfill and waste-to-energy plant near Okhla, new CNG crematoriums, a dog crematorium, work on 10 new multilevel parkings and the target of producing 1.1 crore units from solar power.