Featured Image: Kolkata Municipal Corporation headquarters at S N Banerjee Road in central Kolkata.
Kolkata, 16 September: AFTER much dilly-dallying for the past three years, Kolkata Municipal Corporation (KMC) will finally introduce the Unit Area Assessment (UAA) method for property tax collection in Kolkata from April 2016.
Under UAA, the city will be divided into seven categories based on civic infrastructure and KMC will fix a base rate for property tax per square feet carpet area of a building or house.
This is as against the current Annual Rateable Valuation (ARV) method, under which tax is decided on the actual or probable annual rent that an owner stands to get from his property.
Announcing on Wednesday that the UAA would be introduced from 1 April next year, Mayor Sovan Chatterjee however said that the ARV method of taxation would continue side by side. “Both the method of property tax assessment would be there and it would be up to an owner to choose under which method he wants to pay,” he said.
WHAT IS THE PRESENT PROPERTY TAX METHOD IN KOLKATA:
The present system of property taxation is based on the principle of Annual Rateable Value method. The value of a property is determined after deducting 10 per cent on maintenance and repair account from the actual or possible annual rent realised from the property.
The tax rate under ARV increases proportionately with the individual value of a property. It varies from 11-40 per cent. For ordinary flats the rate of tax depends on the cumulative annual value of all flats in a premise. There is also a provision of 50 per cent commercial surcharge if a property is used on commercial purpose.
WHAT IS UNIT AREA ASSESSMENT (UAA) METHOD:
Annual property tax under the UAA system is calculated on the basis of the following formula:
Kolkata will be divided into 293 blocks and these blocks will be classified into seven categories (A to G) on the basis of market value, infrastructure, facilities etc. Such categories and their corresponding tax value will be revisited every five years.
KMC will fix a base value as per square feet of area corresponding to the respective categories, wherein category ‘A’ will be on a higher base and ‘G’ will be on the lowest.
But to benefit the dwellers of slum / thika-tenanted area will be placed in the ‘G’ category irrespective of where they are located in the city. Similarly, all recognised Refugee Rehabilitation colonies will be placed in category ‘E’.
The property tax will then be decided based on what the KMC has named multiplicative factors that would account for variations in a property such as size, use, age, location within a block, nature of occupancy and type of the structure.
UAA will facilitate a flat tax rate percentage ranging between 6-20 per cent and this would not depend on the annual valuation of a property. The tax rate for developed bustees has been fixed at 8 per cent.
Under UAA, the rate of tax of an individual ordinary flat will not depend on the cumulative valuation of all flats in a premise concerned.
Furthermore, under UAA, an owner will assess his own property on the basis of the rates notified by KMC for his area. This is as opposed to the present system where assessment inspectors carry out the task, thus leaving scope for arbitrary decision.