The Pune Municipal Corporation (PMC) has stopped the 40 per cent concession in property tax for new “self-occupied” residential properties, saying that the state government was in the process of withdrawing the scheme of the civic body.
“The scheme of 40 per cent concession was introduced in 1971 as a relief for people affected by the Panshet Dam tragedy. However, the state government has decided to make it null and void,” said a civic official from the PMC Property Tax Assessment and Collection department.
“The PMC has started the implementation of no concession for new properties that are coming under tax ambit. From now on, new properties that are being assessed by the civic body for charging tax are not being given the 40 per cent concession,” the official added.
Similarly, old properties applying for the concessions were also being withheld, the official said. However, the old properties that were already in tax ambit and were getting 40 per cent concession in the property tax have been issued the bills with concessions at the beginning of financial year, the official said.
PMC’s scheme was hurting its revenue collection
The PMC scheme of 40 per cent concession in property tax has been hurting the revenue collection of the civic body, which has not been able to implement its annual budget effectively for the last few years. The civic body had to depend on loans, grants and funds raised from municipal bonds to implement its projects due to lack of sufficient monetary collection. The withdrawal of the scheme has been facing political opposition and is once again likely to be in a political storm ahead of the Maharashtra Assembly elections.
However, there was no clarity on the day from which the scheme would be withdrawn for old properties, he said, adding, “The PMC administration will convey the difficulty in recovering the difference amount if the concession is withdrawn from back date.”
Another civic official said the state audit department had objected to the PMC concession scheme, saying it could not be applied to just one municipal corporation in the state.
The PMC administration has been trying for the last few years to withdraw the concession scheme, saying it did not make sense to apply the same rule applicable for new constructions when old structures have been redeveloped.
In its previous proposals, the civic administration had said, “The property tax is the main revenue source of the PMC and withdrawing the concession in tax will help in increasing the revenue of the civic body.”
The main revenue source of the PMC has been the Local Body Tax (LBT), which replaced the octroi. However, the Union government abolished the LBT while introducing the Goods and Service Tax (GST). The state government had been compensating for the LBT but there was no assurance on how long it would be continued. “There is no other option but to increase revenue collection from the property tax as it has been the second largest revenue contributor for the civic body,” The civic administration had said.
The PMC has not been able to get much revenue from the building permission charges as it was more dependent on the market condition. “The civic administration was also planning to propose the withdrawal of concession scheme and had discussed the same in revenue committee meeting,” said a civic official.