The Maharashtra government on Monday approved a proposal allowing an exemption in the property tax for residential units having a size of less than 500 square feet. The state Cabinet has approved the proposal to waive the property tax and an ordinance is expected to be issued soon, according to a Times of India report.
For the unversed, the property tax includes water tax, water benefit tax, sewerage tax, sewerage benefit tax, general tax, education cess, tree cess, and street and betterment charges.
The Maha Vikas Aghadi (MVA) government for the first time had announced the exemption in property tax in 2019-20 after the COVID-19 pandemic. With the latest decision of the state Cabinet, the property tax waiver will continue for the fifth consecutive year, the report added.
However, the Brihanmumbai Municipal Corporation (BMC) has been losing a significant part of its revenue due to the property tax waiver by the government.
An official of the civic body said that BMC has been losing as much as ₹300 crore on account of MVA and now the Mahayuti government’s decision, the TOI report added.
According to BMC data, around 16 lakh residential units with less than a 500 sqft area fall within its jurisdictions.
The government said that the move would benefit the residents of Mumbai by saving an additional tax burden of ₹736 crore, the report mentioned.
“There will be no revision of capital value and Mumbaikars will be given a waiver,” the press release read.
Meanwhile, the BMC administration has already revised the revenue collection from the property tax from the budgeted amount of ₹6,000 crore to ₹4,500 crore. The revision was undertaken by BMC after it lost a review petition in the Supreme Court on the capital value system in March 2023. Due to the legal complexities in the BMC’s tax assessment, the civic body is awaiting to send the bills to the taxpayers for the current financial year (FY 2023-24).
As reported by the Free Press Journal, the BMC Commissioner Dr Iqbal Singh Chahal earlier said, “The decision of not raising the property tax for 2023-24 will be taken in the state cabinet meeting on Monday. After that, we can start sending bills for the current financial year from next week.”
In the remaining two months of the current financial year, the BMC needs to collect as much as ₹3,895 crore to meet the revenue target.
(Edited by : Sudarsanan Mani)
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