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Finding itself helpless in recovering mammoth property tax dues, primarily from government buildings, the Chandigarh municipal corporation (MC) is planning to enforce stricter property tax bylaws in the city.
Currently working out stringent measures, the civic body will soon table new property tax bylaws in the General House for approval.
The government buildings in Chandigarh alone owe the corporation a whopping ₹91 crore in property tax, a major source of its annual revenue.
Panjab University, PGIMER, Punjab Engineering College and Chandigarh Golf Club are among the major defaulters (see box).
However, tax recovery remains a challenge, as the civic body has only two remedies under the tax bylaws framed under the Punjab Municipal Corporation Act as extended to Chandigarh.
For starters, it can issue a notice to the defaulters and thereon, proceed with sealing the property in question if dues remain unpaid — a provision hard to implement on ground.
“How can MC seal PGIMER or Panjab University? We need more recourses. We are going to make legal changes in our property tax bylaws so that we have some other recovery options apart from sealing the complete property,” said MC commissioner Anindita Mitra, adding that the new bylaws will give MC more teeth to recover property tax in Chandigarh.
The list of defaulters runs long, with 670 buildings of the Punjab, Haryana, Himachal Pradesh and central governments in Chandigarh, and even the UT administration yet to clear their tax dues.
“Since 2004, property tax owed by government and commercial buildings had mounted to ₹102 crore. After issuing recovery notices, MC was able to recover only ₹11 crore of this amount. But ₹91 crore is still pending, which is hampering the working of the civic body,” said the MC commissioner.
“As recovery of property tax in Chandigarh is an inter-state matter, with buildings of Punjab, Haryana, Himachal Pradesh located in the city, we will also be holding meetings with the respective states to recover the dues. The matter will also be taken up UT administrator Banwari Lal Purohit,” Mitra said.
The civic body started levying property tax, yearly, on commercial land and buildings with effect from November 22, 2004. Around 30,000 commercial properties, including government buildings, fall within MC limits.
The non-residential properties are divided into four zones with fixed tax rates — Zone A has 4,456 properties, Zone B 13,365, Zone C 10,806and Zone D 1,300. Different rates have been set for constructed buildings, uncovered areas and green belts in the measured property.
The property tax on residential land and buildings, also known as house tax, was imposed from 2015-16 onwards, except for properties with a covered area of less than 500 square feet. A total of 77,602 residential properties in Chandigarh are charged property tax on a fixed-rate.
Of the set target of ₹80 crore for the financial year 2023-24, MC has so far collected ₹46 crore as property tax . Every year, property owners are eligible for a rebate of up to 20% if tax is paid between April 1 and May 31. After the rebate period ends, a 25% penalty and interest at 12% per annum is levied on the due tax from the date of issue of the tax bill to the date of actual payment.
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