Kolkata civic body plans new waiver scheme for property tax dues, ET RealEstate

September 30, 2023

KOLKATA: The Kolkata Municipal Corporation (KMC) is set to introduce a fresh incentive scheme to mop up tax dues. The civic body has proposed exemption on interest and penalty to those who clear entire dues within a specified period.

According to a proposal drafted by the assessment department in consultation with the mayor and municipal commissioner, property tax defaulters who pay the entire outstanding amount in less than two years will get a 50% interest waiver and 99% penalty waiver on the outstanding amount.

However, if a defaulter fails to clear dues in less than five years, s/he will be entitled to a waiver of 45% on interest and 75% on penalty.

A taxpayer who clears the dues after five years will get 35% waiver in interest and 50% waiver in penalty. Those who fail to clear dues within 10 years or more will be entitled to only 30% interest waiver and 25% penalty waiver.

It was a long-standing practice that if a property owner paid the total outstanding amount along with the accrued interest at one go, the KMC would waive 99% of the penalty.

“Because of that rule, the defaulting assessee doesn’t see any reason or motivation to pay the dues early. The matter was discussed with the municipal commissioner and, according to his direction, it is proposed to introduce a graded or graduated waiver system to ensure early payment of dues is rewarded while habitual defaulters are penalized,” said a KMC source.

Similarly, the civic brass has decided to offer waiver in accrued interest on outstanding property tax based on the payment timeline.

“We have seen that though the majority of taxpayers clear their dues on time, the civic body’s projected growth in revenue earning from property takes a back seat for habitual defaulters who constitute only 4%-5% of total taxpayers,” said a KMC official.

  • Published On Sep 30, 2023 at 09:24 AM IST

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