SDMC commissioner suggests increasing property tax rates, leaders not on board

The bureaucratic wing South Delhi Municipal Corporation (SDMC) on Friday proposed an increase in property tax rates in some of the colony categories under its jurisdiction.

Presenting his budget speech for the financial year 2020-21, SDMC commissioner, Gyanesh Bharti, said property tax rates could be increased by 1-3% in the residential and non-residential units of C, D, E, F, G and H category of colonies under the municipal bodies’ jurisdiction. However, there is no proposal to hike house tax rates in affluent neighbourhoods such as New Friends Colony, Defence Colony, Sunder Nagar and Anand Lok that fall under category A and B.

“The proposed hike will fetch us Rs 80-100 crore of additional property tax revenue,” Bharti said.

Property tax rates have not been raised in SDMC areas since 2012-13. The financial health of the SDMC has been deteriorating with even basic responsibilities — paying salaries to sanitation staff, teachers in municipal schools and doctors in municipal hospitals among others—have taken a hit.

The political wing of the SDMC, however, did not seem to be very enthused with the proposal, especially, in view of the upcoming Delhi assembly elections. Leader of House in the Bharatiya Janata Party (BJP)-run SDMC, Kamaljeet Sehrawat, said, “We do not believe in burdening honest taxpayers and have already upped our efforts to widen our tax net.” “Besides, with the central government’s scheme to regularise unauthorised colonies, our income from property tax will anyway go up. As residents of these colonies start getting better facilities like drainage, water, roads and streetlights, they would themselves volunteer to pay us property taxes,” she said.

Presenting the budget estimates for the fiscal year 2020-21 Bharti said SDMC’s anticipated expenditure of Rs 5,245crore exceeded its expected income by Rs 541.30crore. “However, we hope to be able to bridge the gap with some money we have leftover from the last fiscal,” he added.

The commissioner recommended that property tax rates for three categories of colonies—C, D and E— be raised from 11% to 12% of their annual property value, in the residential units. In the non-residential units, they would go up from 12% to 15%.

He also proposed that the property tax rates for F, G and H category of colonies in the non-residential units be increased from 10% to 12% while in the residential units, they would remain untouched at 7%.

Other recommendations by Bharti included reducing the one-time rebate on property tax payment up till June 30 from 15% to 10% and introducing a professional tax .