Prop. Tax In UP

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ORIENTATION WORKSHOP ON PROPERTY TAX
Presented By A . K . GUPTA Chief Engineer
(Local Bodies) Govt.of UP Ex.Member (Real Estate
and Urban Planning) Rail Land Development
Authority Ministry of Railway Additional
Director Regional Centre for Urban
Environmental Studies , Lucknow MINISTRY OF URBAN
DEVELOPMENT ,GOVT. OF INDIA
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WHAT IS A TAX ?

• "......pecuniary burden laid upon individuals or
  property owners to support the government, a
  payment exacted by legislative authority. A tax
  is not a voluntary payment or donation, but an
  enforced contribution, exacted pursuant to
  legislative authority....."

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WHO IS TO LEVY TAX ?

• .no one has the right to levy or charge taxes
  except the authority of law. Article 246
  (SEVENTHSCHEDULE) of the Indian Constitution,
  distributes legislative powers including
  taxation, between the Parliament and the State
  Legislature..

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Major Sources of Income for Municipal
Bodies In UP
Sources Major Components of Tax
Under Section 172 of Municipal Corporation Act , Property taxes tax on vehicles, animals, trade and professions a tax on deeds of transfer of immovable property situated with in the city, tax on vacant land theater tax/show tax tax on advertisements, boats, etc. Rents from municipal assets income from municipal undertakings user charges fee and fines etc.
Under Section 128 of UP Municipalities Act 1916 A tax on annual value of building or Lands or both, water tax, drainage tax, scavenging tax trade and professions a tax on deeds of transfer of immovable property situated with in the city, tax on vacant land theater tax/show tax tax on advertisements, boats, etc
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Property Taxes

• A general tax which may be levied, if the
  Corporation so determines, on a graduated scale
• A water tax ( livable in areas where water is
  supplied by the Corporation)
• Drainage tax livable in areas provided with
  sewer system by the Corporation
• A conservancy tax in areas in which the
  Corporation undertakes the collection, removal
  and disposal of excrementitiously and polluted
  matter from privies, urinals and cesspools.

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Taxes which may be imposed

• Subject to any general rules or special order of
  the State Government in this behalf, the taxes
  which a Municipality may impose in the whole or
  part of a municipality are-
• A tax on the annual value of building or lands or
  of both
• A tax on trades and callings carried on within
  the municipal limits and deriving special
  advantages from, or imposing special burdens on
  municipal services
• A tax on trades, calling and vocations including
  all employment remunerated by salary or fees
• A theatre tax which means a tax on amusements or
  entertainments
• A tax on vehicles and other conveyances plying
  for hire or kept within the municipality or on
  boats moored therein
• A tax on dogs kept within the municipality.

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• A tax on animals used for riding, driving ,
  draught or burden , when kept within the
  municipality
• A tax on inhabitants assessed according to their
  circumstances and property
• A water tax on the annual value of buildings or
  lands or of both
• A drainage tax on the annual value of buildings
  livable on such buildings as are situated within
  a distance, to be fixed by rule in this behalf
  for each municipality from the nearest sewer
  line
• A scavenging tax
• A conservancy tax for collection , removal and
  disposal of ex-crementious and polluted matter
  from privies, urinals, cesspools
• A tax on deeds of transfer of immovable property
  situated within the limits of the municipality

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Conditions for imposing property tax

• The property taxes shall in no case be less than
  22 and not more than 32 of the annual value
  of the building or land.
• The general tax shall not be less than10 percent
  and not more than 15 per cent.
• The water tax shall not be less than 7.5 percent
  and more than 12.5 per cent.
• The drainage tax shall not be less than 2.5
  percent and more than 5 per cent and
• The conservancy tax not be more than 2 percent of
  the annual value.

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Preparatory Steps for imposing property tax

• Preparation of assessment list
• Publication of list
• Objection to entries in list
• Authentication and custody of list
• Revision and duration of list
• Conclusiveness of entries in list
• Amendment and alteration of list

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What is the Annual value

• Annual value means As Per the section 172 of
  UP Municipal Corporation Act -
• (a) In the case of Railway Station, Colleges,
  Schools, Hotels, Factories, Commercial buildings
  and other non- residential buildings, twelve
  times the value arrived at on multiplying with
  multiplier to be fixed by rules in the monthly
  rate of rent per square foot of residential
  buildings fixed under clause

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• (b)In the case of a building or land not falling
  within the provisions of clause(a), twelve times
  the value arrived at on multiplying the carpet
  area of the building or the area of the land, by
  the applicable minimum monthly rate of rent per
  square foot of the carpet area in the case of
  building or the applicable minimum monthly rate
  of rent per square foot of the area in the case
  of land as the case.

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Calculation of Carpet area

• Calculation of annual value the carpet area shall
  be calculated as under-
• Rooms- full measurement of internal dimension
• Covered Veranda - full measurement of internal
  dimension
• Balcony, Corridor, Kitchen and Store-50 percent
  measurement of internal dimension
• Garage- one-fourth measurement of internal
  dimension
• Area covered by bathroom , latrines , portico and
  staircase shall not from part of the carpet area.

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Assessment of Property tax for the properties for
self occupied or on rent

• In the case of land and owner-occupied
  residential building which is not more than 10
  years old, be deemed to be 25 less.
• More than 10 years old but not more than twenty
  years old, be deemed to be 32.5 .
• More than 20 years old , be deemed to be 40
  less than the annual value.
• As per the clause (b) in case building on
  rent .
• Which is not more than ten years old, be deemed
  to be 25 more.
• More than 10 years but not more than twenty years
  old, be deemed to be 12.5 more than the annual
  value.

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Classification of Property

• Ward wise and there after within each ward, it
  shall be classified basing on the situation of
  property on three different types of roads,
  namely-
• (A) roads having a width of more than 24
  meters,
• (B) roads having width of 12 meters to 24
  meters,
• (C) Roads having width less than 12 meters.
• Classify the nature of construction
• (A) Pakka building with R.C.C. roof or R.B.
  roof.
• (B) any their pakka building or
• (C) Kachha building that is all other
  building not covered in clauses (A) and (B).

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Classification criteria

• Municipal Commissioner shall accordingly arrange
  all building in a ward in maximum number of nine
  different groups and in case of all vacant plots
  of land, in maximum number of three different
  groups as shows below
• (a) in case of building the nine groups shall
  be as follows
• (I) Pakka building with R.C.C roof situated on a
  road having a width of more than 24 meters.
• (II) Pakka building with R.C.C roof situated on a
  road having width of 12 meters to 24 meters.
• (III) Pakka building with R.C.C roof situated on
  a road having width of 12 meters to 24 meters.
• (IV) Other pakka building situated on a road
  having a width of more than 24 meters.
• (V) Other pakka building situated on a road
  having a width of 12 meters to 24 meters.

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• (VI) Other pakka building situated on a road
  having width less than 12 meters.
• (VII) Kachcha building situated on a road
  having a width of more than 24 meters.
• (VIII) Kachcha building situated on a road
  having a width of 12 meters to 24 meters.
• (IX) Kachcha building situated on a road having
  width less than 12 meters.
• In case of land, the three groups will be as
  follows-
• (i) Land situated on a road having a width of
  more than 24 meters
• (ii) Land situated on a road having a width of 12
  meters to 24 meters
• (iii)Land situates on a road having less than 12
  meters.

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Fixation of minimum monthly rate of rent

• The Municipal Commissioner shall once in every
  two years fix the minimum monthly rate of rent
  per unit area (square foot) of the carpet area
  for every group of building within a ward or the
  applicable minimum monthly rate or rent per unit
  area (square foot) of the area for every group of
  land as the case may be having regard to -
• (a) the circle rate fixed by the collector for
  purpose of the Indian Stamp Act, 1899 and
• (b) the current minimum rate of rent in the area
  for such building or land

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Publication of the rates of minimum monthly rent

• The objections when decided under Rule 4-A, the
  Municipal Commissioner shall notify in two daily
  newspapers having circulation in such city, the
  minimum monthly rate of rent per square foot of
  the carpet area for every group of building
  within a ward, or the applicable minimum monthly
  rate of rent per square foot of the area for
  every group of land, as the case may be, and
  thereafter it shall become final.

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Tax Assessment

• The assessment of tax shall be made on the basis
  mentioned here under
• (1) Calculation of Annual Value Annual
  Value-Carpet area x fixed per unit area monthly
  rate of rent x 12.
• OR
• Covered area x fixed per cent unit area
  monthly rate of rent x 12 x 80
• (2) Payable tax Taxes would be payable in
  according with the rates fixed under Section 148
  of the Act on the basis of annual value.

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Calculation of Annual rental value of
non-residential building
S.no Description of property Multiplier
1 Commercial complex ,shops, bank offices, hotel upto 3-star, pvt. hotel, coaching and training institutes(excluding approved by state govt.) 5
2 Clinic ,poly clinic, diagnostic center, nursing home, medical store and health center 3
3 Sport center, i.e., gym, physical fitness center, theater, cinema hall 2
4 Hostel , and the educational institution excluding the institution covered under section 177C of act. 1
5 Petrol pump, gas agency depot and godown 3
6 Malls, hotel above 4-star, pubs , bars, and the hotels where wine are served 6
7 Community center , kalyan mundaps, vivah club and similar types of buildings 3
8 Industrial units, govt. ,semi govt. and PSUs offices 3
9 Building having the towers and hoarding, T.V towers, communication tower and any other tower which are established in open area or in the roof of the building 4
10 Buildings which are not covered above 3
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Assessment list

• The assessment list in respect of all the
  building or the plots or both shall be prepared
  after calculating the tax on the basis of
• (a)Details submitted in Form A and Form B by the
  owners or occupiers of the building and the
  lands or
• (b)information collected by the Municipal
  Commissioner or an officer authorized by him in
  this behalf their information's in Form A or Form
  B are not submitted within the fixed time

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Contents of Assessment list

• (c) the assessment list shall contain
• (i) Name of road and mohallah in which property
  situates.
• (ii) Designation of the property by name, by
  number or by any other specification sufficient
  for identification.
• (iii) Name of the owner whether it is
  owner-occupied or on rent. If on rent, the name
  of the tenant.
• (iv) The carpet area base and covered area base
  the minimum monthly rate of rent per square foot
  for
• the group for the building or land.
• (v) Carpet area or covered area of the building
  or the area of the land or both.
• (vii) Year of construction of building
• (viii) Nature of construction of the building

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Self-Assessment of Tax

• The Owner or occupier primarily liable for
  payment of tax in respect of a residential
  building may himself determine the property tax
  in accordance with the provisions of the Act and
  deposit the property tax so assessed by him in
  the notified bank together with a statement of
  self assessment.

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Penalty

• Municipal Commissioner shall arrange for
  random Inquiry of at least ten per cent of the
  total number of statement of the carpet and other
  areas of the building or land or statements of
  self assessment, as the case may be submitted and
  in event of any part of the area of land having
  been concealed, or furnished incorrect details he
  shall issue notice to the owner or occupier, as
  the case may be to show cause within to weeks as
  to why a penalty not exceeding four times of
  difference of tax due to concealment of area or
  incorrect details of property be imposed.

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• After considering any explanation that may be
  offered by the owner or occupier, as the case may
  be and making such inquiry as it may consider
  necessary, the Municipal Commissioner or officer
  authorized by him in this behalf may impose a
  penalty not exceeding as per notice and order,
  the same be realized together with the amount of
  property taxes.
• In the case of non- submission of the requisite
  details within fixed time under sub-rules (1) and
  (3) of rule 3, the Municipal Commissioner or any
  officer authorized by him in this behalf may
  impose such penalty which may be Rs. 100.00,
  1000.00, 5000.00, and 25,000.00, for the area of
  land up to 50 square meter, 200

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• square meter and 400 square meter or more
  respectively. Provided that in the case of delay
  of 30 days 5 of the penalty shall be deposited
  as late fee. In case of returns not submitted
  within time fixed, at the time of preparing
  assessment list under Rule 5, carpet area rates
  proposed under Rule 4-A shall be, used in
  addition to the penalty.
• A person who violates the provision of sub-rule
  (4) of rule 3 shall be liable to pay penalty
  double amount of the property tax or at the rate
  of Rs.

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Compounding of the penalty

• Penalty under Sub-rules (1), (3) and (4) of Rule
  8 may be compounded by Municipal Commissioner or
  an officer authorized by him in this behalf, with
  an amount not less than one-third and not more
  than half the maximum amount of penalty.

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• Rooms-full measurement of internal dimension
• Covered Verandah full measurement of internal
  dimension
• Balcony, Corridor, Kitchen and Store 50 per
  cent measurement of internal dimension
• Garage- One- fourth measurement of internal
  dimension
• Area covered by bathroom, latrines, portico and
  staircase shall not from part of the carpet area.

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The New Approach

• Modernization of property tax system by linking
  GIS and property data base.
• Reassessment of all properties on unit area
  basis.
• Improving rentals of municipal properties by
  amendment of Rent control Act.
• Land monetization of vacant lands and other
  municipal assets.

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Implementation Strategies

• A new base map is needed to make it possible to
  identify all taxpaying units (houses).
• A method of identification of the taxpaying units
  needs to be developed.
• A supporting Geographical Information System
  (GIS) needs to be developed.
• The revenue collection needs to be reorganized to
  utilize the GIS application.
• The staff needs to be trained to utilize the new
  system.

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Thank You