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House tax revamp after 20 years

Property tax in Calcutta, that double-edged civic sword, will undergo an overhaul in 2004 — for the first time in 20 years.

Mayor Subrata Mukherjee confirmed on Thursday that the exercise — the outcome of which will draw diverse reactions — would begin next week in Jadavpur, singled out as one of the “tax havens”, along with Behala and Garden Reach.

The overhaul will grant owners of tenanted houses relief in terms of the amount of tax they have to pay on the rent received. The rates in “Calcutta proper” and the “added areas” will be recast. The forecast is a slash in wards 1-100 and a hike in the rest.

“The tax overhaul will be part of our effort to modernise Calcutta in tune with the global trends,” said Mukherjee.

Chief minister Buddhadeb Bhattacharjee is believed to be backing the Calcutta Municipal Corporation (CMC) tax reforms, as he is convinced that civic taxes must be revised in order to develop the city.

In CMC parlance, the three “tax havens” are also known as “added areas” because they had been added to the civic body as late as 1985 by the ruling Left to widen their base.

Ever since, house-owners in the “added areas” have been pampered with abnormally low taxes — as prevalent before their incorporation into the CMC — for reasons more political than civic.

The revision exercise may turn out to be a boon for house-owners in the city proper, as they could enjoy a slash in the property tax by about 10 per cent. It could hit house-owners in the added areas where it hurts. Indications are that they would have to shell out “reasonably high rates” to make up for the loss.

“We are hopeful of introducing the revised tax structure from this April. Our assessment inspectors are already doing the rounds of Jadavpur for this purpose,” said municipal commissioner Debashis Som.

Welcoming the move, Amar Mitra, of All Calcutta House Owners’ Association, said: “Better late than never. We have been demanding a 30 per cent reduction in the tax to bring all buildings in the city’s 141 wards under a more reasonable tax structure.”

Under the present system, the CMC charges 40 per cent of 90 per cent of the annual valuation as annual property tax for residential buildings. An additional 20 per cent is levied on the property tax as surcharge for commercial buildings. In the budget proposal for the year 2004-2005, the mayor has decided to bring down the chargeable rate of 40 per cent to 30 per cent.

“The total number of buildings in the added areas almost equals the number of buildings in the city proper. So, if we can get down to tax collection more seriously in these areas, we can make up for the loss incurred in the city proper,” said Ashok Roychaudhury, director-general (building), CMC.

The great divide in property tax collections from various parts of the city shows up squarely in the statistics. Though the number of buildings is almost the same, the CMC earns Rs 210 crore as property tax from the city proper and just Rs 18 crore from the added areas. That, the mayor assures, will change in 2004.

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