CHANDIGARH – The Punjab Government on Tuesday slashed the property tax by almost 50 per cent. All residential and commercial properties, including rented ones, will have to pay almost half the tax they paid last year.
The state government will now be collecting around Rs 250 crore as property tax, as against a target of Rs 450-500 crore set in 2013-14. The government took the populist decision after “high property tax” became a major issue during the Lok Sabha elections this year and saw voters being weaned away from the Akali-BJP alliance.
The decision was taken at a Cabinet meeting held under the chairmanship of Chief Minister Parkash Singh Badal today. The Cabinet gave a nod to amendments to the Punjab Municipal Act, 1911, and Punjab Municipal Corporation Act, 1976, which allows exemption from tax to all properties measuring up to 50 sq yd and single-storey houses up to 125 sq yd and flats for poor (up to 500 sq ft super-covered area).
Religious places, cremation grounds, orphanages, historical buildings, all government health care centres and old age homes, too, have been exempted from paying tax. BPL families and ex-servicemen have been exempted from paying property tax, besides concessions being introduced for educational institutions and land/property owned by widows and physically challenged. Tax will be levied only on the built-up area and after ground floor; tax on all other floors will be half.
The tax has been delinked from the collector rate of each place. Instead, the entire state has been divided into three zones — the A category cities (Amritsar, Ludhiana, Jalandhar, and Patiala), the B Category cities (all other cities having municipal corporations, municipal councils) and C Category (which includes all places having nagar panchayats). Local Bodies Minister Anil Joshi said each city was further divided into three zones, inviting different tax slabs (on per square yard basis). “We have also reduced the property tax on rented commercial property from 15 per cent of rent initially to just 7.5 per cent now. Rent on marriage palaces, multiplexes and malls, too, have been reduced and procedure of filing tax has been simplified, to make self-assessment easy,” he said, adding that people would have to pay the old tax for 2013-14, and the new reduced property tax will become effective from this year (2014-15) onwards. He said the Cabinet had also decided to extend the period for regularisation of illegal colonies by a year.
