The urban development and housing department on Wednesday decided to approve constitution of Bihar property tax board, paving the way for the Patna Municipal Corporation (PMC) to recover around Rs 70 crore a year accrued following non-payment of holding tax.
The newly sanctioned board would be entrusted with the task of conducting a survey every five years and assist the state government in assessing the actual rental value and market value of plots and buildings.
Besides, the “mandatory declaration’ clause of the property tax rules requires every holding owner, whose house had not been earlier assessed, should self-assess his or her property within three months following notification of the statutes. The holding owners would have to calculate the tax and pay the amount to the municipality. The property tax rules were approved by the cabinet on Tuesday. The rules envisage that the municipality or the department would prescribe the self-assessment forms and issue guidelines to facilitate the process.
PMC sources said failure in conducting the mandatory self-assessment within the stipulated time would call for a fine of Rs 2,000 on residential holding and Rs 5,000 on other holdings. The civic body is estimated to have been incurring a loss of around Rs 70 crore because of non-assessment of around 2.5 buildings in the city. These buildings are not covered under the holding tax ambit. Though the Bihar Municipal Act, 2007, envisages general survey of holdings after a period of five years, it has not been done in the PMC area since 1996.
“In accordance with the provisions of the 13th Finance Commission, we approved the constitution of Bihar property tax board. The board would be responsible of implementing various provisions of the Bihar Municipal Property Tax (Assessment, Collection and Recovery) Rules, 2013,” urban development and housing department minister Prem Kumar said.
The clause in the property tax rules state that general revision of the holding tax should be done by municipalities every fiver years. This includes reassessment due to change in classification of roads, use, nature of non- residential use, occupancy and other factors.
The rules also state that every person, liable to pay holding tax on land and building, should within 30 days of acquiring land or building intimate the municipality concerned for assessment of holding tax. The statute adds that every municipality, in not more than six months from date of notification of these rules by the government, introduce the system of holding tax self-assessment. In case owners of the holdings intentionally suppress information essential for assessment of holding tax, then they would be liable for payment of the difference between the actually payable amount and the self-assessed tax. Besides, they would have to pay a cent percent penalty of the differential amount.