Cashstrapped east civic body proposes cess on property tax

NEW TAXES The EDMC plans to add education cess and introduce a betterment tax in latest budget

NEWDELHI: The cash-strapped East Delhi Municipal Corporation (EDMC) plans to introduce three new taxes in the next financial year, charge more on entertainment levy and add a cess to the property tax to stem its rising deficit, up from ₹2,250 crore last fiscal to ₹3,300 crore.

Two of the three new taxes in EDMC’S 2018-19 budget will result in a higher property tax. The third, a professional tax, will have to be paid by all persons living in east Delhi with an annual income of ₹5 lakh and above. Retired senior citizens have, however, been excluded from the proposed professional tax.

All these proposal must be approved by the house of elected councillors and the standing committee before being implemented.

EDMC commissioner Ranbir Singh on Thursday proposed a 5% education cess and a 15% betterment tax to be levied on the existing property tax. The betterment tax, however, will be paid by the property owners in a colony where the civic body undertakes a development project, beyond its obligation, leading to higher real estate prices in that area.

Sources said the South Delhi Municipal Corporation, which will present its budget on Friday, is most likely to propose similar taxes. Unlike the North Delhi Municipal Corporation, which proposed a uniform property tax slab of 15% for all residential areas and 20% for non-residential ones, the EDMC does not plan to change the current rates.

Instead, it has proposed to enforce the recommendations of Municipal Valuation Committee III, which has led to shift in prop- erty categorisation of all commercial and industrial areas.

The proposal is under consideration by South and North corporations.

“Though the councillors and industries are resisting the move, we have implemented the recommendations and requested the Centre to issue directions as we need ways to increase revenues,” said EDMC commissioner. Following this, any commercial property constructed on a plot bigger than 1,500 sqm will come under category A (for property tax slab rate), irrespective of its location.

Of the three civic bodies, the EDMC is the poorest. It has strug- gled to implement development projects and failed to pay salaries leading to strikes by workers, particularly those engaged in public sanitation and health.

The civic body collects ₹800 crore in taxes and gets ₹510 crore annual grant-in-aid. The amount is not even sufficient to pay the annual salary bill of ₹2,400 crore.