Delay in tax recovery from merged areas hampers PMC's revenue generation

Time of India

3 days ago

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Pune: Delay in recovery of tax from properties in 32 merged areas under PMC is hampering overall revenue generation of the civic administration.
Residents of these areas have been demanding that the civic administration reduce property tax rates.
The state govt has put a cap on charging "maximum of twice the property tax compared to what the residents were paying when they were under gram panchayat" but the nitty-gritty of the implementation has not been worked out by the state govt, claimed PMC.
According to civic officials, the state has not provided any clarity on rateable values and other formulas to charge rates as per its directives. "So, we are charging property tax as per standard methods.
The revenue generation is very limited from these areas because many property owners have not paid taxes," said a senior official of Pune Municipal Corporation (PMC).
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The corporation received around Rs 350 crore lessthan last year from property levy due to issues of tax recovery in newly-added areas. The civic administration may come up with an amnesty scheme for these areas, as the state on Wednesday gave new directives to introduce such a scheme for merged locations.
The administration earned around Rs1,350 crore till the end of June 2024, which has gone down to Rs1,000 crore this year.
"Many property owners, who have not paid tax yet, will pay their dues by the end of month to avail themselves of the benefit of tax discount. The civic administration hopes to see an increase in revenue in next three to four days," said a senior official of PMC.
According to activists, apart from delay in recovery from merged areas, even the complications caused due to implementation of 40% tax rebate in connection with PT3 forms have also adversely impacted PMC's income.
"Many property owners are getting tax discounts because of issues related to PT3 forms despite being eligible to get the benefit. The administration should give more time for paying the tax at the discounted rates," said Ujwal Keskar of Aaple Pune, Apala Parisar organisation.
Minister of state for urban development Madhuri Misal said on Thursday that PMC had been told to submit a proposal to the state govt for property tax calculations for merged areas.
Citizens from these areas have claimed that the tax proposed by the civic administration was "higher" than the tax imposed by the gram panchayat before the merger. The citizens are not ready to accept the tax calculation; hence, PMC has been asked to re-draft a proposal and submit the same to the state govt.
According to residents, if the tax is charged at the civic administration's rate, the tax amount will go up at least by five times.
Along with the residential properties, even the commercial establishments will have to pay additional tax. The residents of the merged villages are apprehensive about paying increased property tax.
According to property owners, Rs 2 per square foot is charged on an average as property tax per annum by the gram panchayat. The civic body charges Rs 2 per month. Effectively, the tax amount per square foot went up to around Rs 24 per year when they were merged into PMC.
The same situation is likely to repeat in the 23 merged villages.
PMC data show that the civic areas had around 8.5 lakh properties prior to 2017. After the merger of 11 villages, the number has gone up to around 10 lakh. Nearly 2 lakh properties have been added to the tax ambit of PMC after the merger of 23 villages. The total number of properties under PMC limits is 12 lakh.
Pune: Delay in recovery of tax from properties in 32 merged areas under PMC is hampering overall revenue generation of the civic administration.
Residents of these areas have been demanding that the civic administration reduce property tax rates. The state govt has put a cap on charging "maximum of twice the property tax compared to what the residents were paying when they were under gram panchayat" but the nitty-gritty of the implementation has not been worked out by the state govt, claimed PMC.
According to civic officials, the state has not provided any clarity on rateable values and other formulas to charge rates as per its directives.
"So, we are charging property tax as per standard methods. The revenue generation is very limited from these areas because many property owners have not paid taxes," said a senior official of Pune Municipal Corporation (PMC).
The corporation received around Rs 350 crore lessthan last year from property levy due to issues of tax recovery in newly-added areas. The civic administration may come up with an amnesty scheme for these areas, as the state on Wednesday gave new directives to introduce such a scheme for merged locations.
The administration earned around Rs1,350 crore till the end of June 2024, which has gone down to Rs1,000 crore this year.
"Many property owners, who have not paid tax yet, will pay their dues by the end of month to avail themselves of the benefit of tax discount. The civic administration hopes to see an increase in revenue in next three to four days," said a senior official of PMC.
According to activists, apart from delay in recovery from merged areas, even the complications caused due to implementation of 40% tax rebate in connection with PT3 forms have also adversely impacted PMC's income.
"Many property owners are getting tax discounts because of issues related to PT3 forms despite being eligible to get the benefit. The administration should give more time for paying the tax at the discounted rates," said Ujwal Keskar of Aaple Pune, Apala Parisar organisation.
Minister of state for urban development Madhuri Misal said on Thursday that PMC had been told to submit a proposal to the state govt for property tax calculations for merged areas.
Citizens from these areas have claimed that the tax proposed by the civic administration was "higher" than the tax imposed by the gram panchayat before the merger. The citizens are not ready to accept the tax calculation; hence, PMC has been asked to re-draft a proposal and submit the same to the state govt.
According to residents, if the tax is charged at the civic administration's rate, the tax amount will go up at least by five times.
Along with the residential properties, even the commercial establishments will have to pay additional tax. The residents of the merged villages are apprehensive about paying increased property tax.
According to property owners, Rs 2 per square foot is charged on an average as property tax per annum by the gram panchayat. The civic body charges Rs 2 per month. Effectively, the tax amount per square foot went up to around Rs 24 per year when they were merged into PMC.
The same situation is likely to repeat in the 23 merged villages.
PMC data show that the civic areas had around 8.5 lakh properties prior to 2017. After the merger of 11 villages, the number has gone up to around 10 lakh. Nearly 2 lakh properties have been added to the tax ambit of PMC after the merger of 23 villages. The total number of properties under PMC limits is 12 lakh.