BMC refunds Rs 186 crore to 5,000 property owners

After realising an error in their ways, the civic body has refunded Rs 186 crore to 5,000 property owners and is in the process of clearing extra arrears of another 3,000 in the next 15 days. The refund comes after residents and activists complained of the additional amounts they had to pay owing to the transition from rateable value system to the capital base value.u00a0

According to the rateable value system the property taxes were calculated on based on the maximum amount of rent fetched by a property in a year. The BMC, however, switched to the capital value based system, which calculates property taxes depending on present market value of the property. The system came into retrospective effect from April 1, 2010, which meant that people had to pay three year's tax in arrears.

Out of the 11,000 property owners they have to refund, the civic body has repaid 5,000 and is in the process of repaying 3,000 others. Officials said another 3,000 would be processed later. Ram Das, chief accountant, finance department, BMC, said, "More than 5,000 properties have been refunded the extra money that was collected and the civic body has refunded an amount of Rs 186 crore.

The calculation depends on various factors hence, the amount cannot be estimated in refunding all the properties who have paid extra." Rajeev Jalota, additional municipal commissioner, said, "BMC has been successful in paying the refund to many and another 3,000 will be refunded in the next 15 days. The remaining will be given their refunds after this."

Money matters
After octroi, property tax is the civic body's second largest source of income. In 2012-13, the BMC collected Rs 3,657 crore as property tax. The expected property tax income for 2013-2014
is Rs 3,956 crore.

Five factors on which tax is calculated
The BMC has implemented capital value based property tax system in which property tax is being calculated on five factors:
The price of property
The area
Age of the building,
Whether it is a commercial or residential property
Type of construction