Article XII
Article XII
ASSESSMENT OF PROPERTY & TAXES
(Guide Lines of Municipal Corporation of Gr. Mumbai)
Posted on 10th July 2003
BY: SUDHAKAR DOKHANE
(Past President PEATA (I)
Assessment Tax is a revenue earned by Civic authority for the services being rendered to public viz. water, sewerage, education, streets etc., which is based on Ratable Value decided by the assessment department. The department publishes periodically the tables of ratable value for different localities, which remain in force till the date taxes are amended. Following preliminary information will give fair idea as to how the taxes are worked out and recovered.
Which properties / premises attract assessment taxes ?
All the private properties, (lands or lands with buildings there on) either free hold
or lease hold, attract assessment taxes. The vacant lands or lands under construction are assessable. After the construction is completed the premises are assessed together with land component, from the date of occupation permission granted.
Which properties / premises do not attract assessment taxes ?
Following properties / premises are exempted from assessment taxes: -
The lands or land with buildings owned, occupied / used by the State or the Central Govt.
Lands/Premises owned by Civic authority. (Municipal Corporation)
Lands reserved for non-buildable public reservations in the development plan i.e. play grounds, gardens, roads etc.
The lands / premises owned and used by public charitable trusts viz. temples, hospitals, schools etc. are partially exempted from the assessment taxes.
How the taxes are worked out ?
The taxes are worked out on the basis of Ratable Value of the properties/premises
determined by the assessment department.
What is ratable value ?
The value of property reduced by statutory deduction is Ratable Value (R.V.).
The statutory deduction is 10%. : – The ratable value (R.V) is based on fair and reasonable Annual Rent of the property / premises presumably it would earned, deducting 10% statutory deduction.
For example: -
i) If yearly Rent is : Rs.1000/-
Less: ii) 10% statutory deduction : Rs. 100/-
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Ratable value is : Rs. 900/-
Whether the Ratable Value can be challenged ?
Yes. It is experienced that the ratable value determined by the department in
initial stage (when the first notice is served to assessee) is always on higher side unless challenged.
Under section 167 of BMC Act 1888, the assessee has to lodge objection for the
ratable value, within 15 days in writing with the department, otherwise ratable value so decided is treated as final.
It is advisable that the assessee should lodge objection in time. In spite of
objections, if R.V. is not changed the assessee can appeal to the appropriate civic authority failing which he can challenge the same in the court of law.
What is the percentage of taxes in relation to ratable value ?
Generally the taxes are 75% to 80% of the ratable value for residential premises.
For commercial premises it is double and one half times for industrial premises.
How the taxes are recovered ?
The taxes are recovered in two half-yearly equal installments viz.: -
April to September (1st installment).
October to March/every year (2nd installment)
What actions Civic authority can initiate for non payment of taxes ?
The Civic authority under the provisions of BMC Act with due process can
recover the taxes by: -
i) Charging the Penalty with interest
ii) Attaching and or auctioning the properties / premises
Note: a) Non payment of taxes is an offence and assessee is liable for prosecution.
The landlord is always liable for payment of taxes.
Whether any rebate / refund is permissible for vacant premises ?
For vacant premises land lord can claim refund in general taxes only, for vacancy
period subject to: -
The vacancy is intimated to the department in time i.e. on or before 15th of April & October of every year.
The vacancy is verified by the department, & the tax bills are paid upto date.
Subject to above compliances the department can refund 2/3 amount of general
taxes to the assessee. If the notice of vacancy is not given in time the refund can be refused.
What are the contents of tax bill ?
Tax bill consists of following: -
Name & address of Assessment authority & Assessee.
Description of property.
Ward number under which property is assessed.
Period of taxation, type of premises: Residential / Non-residential.
Year from which the property is assessed.
Bill and last date within which the payment is to be remitted.
Retable value, Payment payable.
Different heads of taxes: -
Description Percentage of taxes related to ratable value
(w.e.f. 1.4.2000)
i) General tax : 30%
ii) Water tax : Not included if there is authorised
connection to premises.
iii) Drainage tax : As above
iii-A) Repair cess tax : By separate bill if property is cessed.
iv) Water benefit tax : 12.50%
v) Sewerage benefit tax : 7.50%
vi) Education cess tax : 12.00%
vii) Tree tax : 5.00%
viii) Street tax : 15.00%
Notes:
The Municipal Corporation can charge additional taxes for larger residential premises under “Larger Premises Tax,” in case the carpet area of flat is 125 Sq. Mtrs. or above.
The above text is based on the information collected, on present working of the assessment department of Municipal Corporation of Gr. Mumbai. The entire process is very much complicated and involves lot of technical compliance from time to time. It is advisable to consult the expert in the filed for proper assessment & benefits thereof.
