NEWS – The BBMP introduced a new property tax system aimed at fixing leaks and rationalizing the tax structure

HIGHLIGHTS

Structure of the New Tax Regime:

• Properties are categorized into six distinct heads, including residential (self-use & tenanted), commercial, industrial, star hotels, exempted, and fully vacant lands.
• The previous zonal classification system has been eliminated in favor of individual property guidance values.

Online Process and Tax Calculation:

• Citizens are required to input property details online, with tax calculation based on the current guidance value.
• The system allows citizens to question and correct guidance values online, with unaddressed claims considered accepted after three months.

Objective of the New System:

• The primary goal is not to increase the tax burden but to simplify and rationalize the taxation process.
• Maximum yearly increases are capped at 10%, ensuring manageable tax burdens for property owners.

Comparison with the Old System:

• The old system relied on zonal classifications and the Self Assessment Scheme (SAS), leading to potential tax leakage.
• The new system uses nominal rates based on guidance values, ensuring fairness and accuracy in taxation.

Bengaluru’s new property tax system represents a significant shift towards fairness, accuracy, and efficiency in tax collection, aiming to plug leaks and ensure a sustainable revenue stream for city governance.