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Who is speaking truth over property tax in South Delhi?


New Delhi, June 27: The politics over property tax in South Delhi has started.

Mukesh Sharma, senior Congress leader and former MLA from Uttam Nagar has alleged that the Bharatiya Janata Party (BJP) led South Delhi Municipal Corporation (SDMC) has cheated people by doubling the tax on rented properties.

File photo of Mukesh Sharma

The SDMC Mayor has refuted the allegation and said Sharma is running a misinformation campaign.

"Officers of SDMC have been issuing notices to the people living in unuthorised colonies and urbanlised villages of South Delhi. They are also extorting money, " Sharma told media persons.

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According to him, preparations are on to implement this decision in addition to unauthorized colonies, DDA flats, urbanised and rural villages as well as also to resettlement colonies (jhuggi-jhopdi colonies).

An extra amount of more than Rs.500 crore would be recovered from the people, he said.

"The residents of these colonies and villages have given their tiny shops on rent as per their necessity. As a result of this decision about 70% of properties would be covered under this decision," said the former Congress MLA.

He has written a letter to Lt. Governor of Delhi and warned that in case this decision is not reversed, agitation would be launched against the Municipal Corporation and Delhi Government.

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Tax of these properties is increased

  • The SDMC has increased property tax for industrial and other non-residential areas from April 1, 2019.
  • This came into force after the SDMC partially approved the third municipal valuation committee's (MVC) report .
  • The MVC report also suggested to increase property tax rate for residential properties, which was rejected by the SDMC.
  • The annual value of a property is determined on the basis of six factors - age, unit area, structure, occupancy, area, and use factor.
  • The MVC proposed changes in occupancy, unit area and use factor, but recommend age and structure factors to be same.
  • Occupancy factor depends on whether property is self occupied or rented out.
  • Unit area value per sq metre is the value per sq metre of the built up area of the property based on category it belongs to.
  • Delhi is divided into eight categories from A to H based on the value of properties in the colonies belonging to each of these categories.
  • Use factor is the factor assigned by MCD based on the usage of property.
  • Age factor ranges from 0.5 to 1 based on the age of the property. New properties are taxed higher compared to older ones.
  • Structure factor depends on the construction. For eg. RCC construction.
  • The occupancy factor of a non-residential rented properties has been doubled, which means the amount paid by the occupant will be double now.
  • As per the revised use factor, the property tax of vacant industrial properties, guest houses, and houses earning rent by installing mobile towers has been doubled.
  • However, there has been increase of 50% in property tax of banquet halls, recreational clubs such as swimming pools, cinema halls and malls.

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