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Bengaluru civic body may waive penalty on property tax demand, Real Estate News, ET RealEstate

Bengaluru civic body may waive penalty on property tax demand, Real Estate News, ET RealEstate
BENGALURU: In a damage-control exercise, the Bruhat Bengaluru Mahanagara Palike (BBMP) is considering waiving penalty and interest component on tax demand it had raised against thousands of property holders, alleging that they had not factored in zonal reclassification while paying the levy.

The move comes after the Palike drew flak for serving notices on some 78,000 property owners on charges of paying property tax less than what they were supposed to give for four assessment years from 2016-17 till 2019-20. Claiming that the owners had chosen the wrong zone to pay tax, the civic agency had imposed double the difference amount as penalty and 24% interest per annum.

With property owners crying foul that they were never informed about the zonal reclassification, BBMP officials are into course correction now. “There was a communication gap that created the confusion. We’re exploring means to ensure that property owners are not burdened with undue penalty and interest component,” said BBMP administrator Rakesh Singh.

As per the self-assessment scheme (SAS) rolled out in 2000, properties are classified under eight value zones, based on published guidance value of the locality or the street and the rate of property tax is fixed accordingly. Zone A attracts the highest tax rate, while zone F is in the lowest slab. In case a property owner chooses a lower zone wrongly, s/he has to pay double the difference amount and 2% interest.

According to the rules, BBMP is mandated to reclassify the zones and revise rates once in three years (block period) since the value of properties are subject to fluctuation based on the variation in rental rates and current guidance value. BBMP reclassified the zones in 2008-09 and again in 2016-17.

“In the first place, the Palike itself violated norms of the block period by failing to reclassify the zones. It also did not communicate about the latest reclassification of zones to property owners and they promptly paid tax based on the earlier classification,” former mayor and Congress MLC PR Ramesh said.

“After receiving complaints and grievances from many property owners, we have referred the matter to the administrator. He is looking into it,” said BBMP chief commissioner Gaurav Gupta.


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Written by Realty Beat

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