KMC to collect property taxes by Unit Area Assessment method

The property tax of people living under Kolkata Municipal Corporation (KMC) will be calculated by the Unit Area Assessment (UAA) method from April 1, 2017.

It is a major move in the history of KMC. The Kolkata Municipal Corporation (Amendment) Bill, 2016 which deals with UAA was passed in the Assembly on Thursday.

Both, Sovan Chatterjee, Mayor and Firhad Hakim, state Municipal Affairs minister said that UAA would enhance KMC’s revenue. Chatterjee said UAA would give property tax relief to the people.

The property tax will be calculated on the basis of certain specific parameters like the location of the property, the width of the road, infrastructure, distance of the local market, bus station, Metro station from the property etc.

This will put an end to the age old corrupt practises relating to calculation of property tax.

As there are no definite criteria, the property tax is calculated on the basis of fair rent of the area which is taken notionally. Now, the inspectors who visit individual houses and flats often increase the tax when they fail to get bribe.

The property tax is later determined by the hearing officer and the owners who are not satisfied with the hearing go to the Municipal Assessment Tribunal where thousands of cases are still pending.

While giving loans to upgrade water supply system, Asian Development Bank first requested KMC to streamline the Assessment procedure. Senior civic officials visited several cities in the country to study UAA system with the fund given by ADB. A committee under the chairmanship of the then municipal commissioner Alapan Bandyopadhyay was set up to frame UAA.

The committee gave its report but the Left Front controlled board (2005-10) did not implement it. Steps were taken when Sovan Chatterjee became the Mayor in 2010. Meetings were held where civic officials interacted with house owners and made them understand the new system. Under UAA, self assessment of property tax will be done.

The existing system of calculating property tax has a major loophole in calculating taxes of ceremony houses and shopping malls.

The KMC notionally calculate the tax of ceremony houses hoping that it would be let out for 100 days. But now, many ceremony houses are rented out for more than 100 days. Also, the receipt given to the person who has booked the house is less than the actual money taken.

UAA will remove this as tax will be calculated on the area of the property along with certain other parameters.

In case of shops in malls, the rent receipts given to the owners are much less than the actual rent. So, KMC’s revenue is badly hit as the property tax is calculated on the basis of the rent receipt shown to KMC.

Under section 198A, people were given property tax benefit. This discretionary section has been removed under the new Act.