JAMMU, Feb 21: The Union Territory administration today ordered imposition of Property Tax in Municipal areas of the Union Territory from April 1.
The tax rates will be five per cent of Taxable Annual Value (TAV) for residential properties and six per cent for commercial properties.
However, residential houses up to a built-up area of 1000 square feet have been exempted from the purview of Property Tax while smaller assets have been taxed at very lower rates. The tax rates are, however, far less as compared to Chandigarh, Delhi and Ludhiana.
People living in posh localities like Gandhi Nagar in Jammu and Rajbagh in Srinagar with values of their assets being more than Rs 5 crore, will have to pay Rs 500 per month while people having 3 BHK apartment will have to pay just Rs 100 per month.
Similarly, small commercial establishments especially shops up to size of 100 sq ft and 200 square feet are also being charged with minimal tax. Most of the shops in neighbourhood areas and old markets fall in this category.
Property Tax is levied annually and can be paid in two equal instalments. As per Act, 10 percent rebate can be availed by early submission of Property Tax.
The Property Tax, as per the sources, will help Municipal bodies to generate revenue for better Municipal services with minimum tax implication to residents. Revenue generated from Property Tax will be used to improve infrastructure and enhance quality and levels of services provided by the Municipal bodies.
Further, all places of worship including Temples, Masjids, Gurudwaras, Ziarats etc have been exempted from the payment of Property Tax.
“In exercise of the power conferred by section 71A of the Jammu and Kashmir Municipal Act 2000, the Government hereby notifies the rules for levy, assessment and collection of Property Tax in the Municipalities and Municipal councils of the Union Territory,” Housing and Urban Development Department Principal Secretary H Rajesh Prasad said in a notification.
In October 2020, the Ministry of Home Affairs (MHA) empowered the Jammu and Kashmir administration to impose the property tax after an amendment to the J&K Municipal Act, 2000 and J&K Municipal Corporation Act, 2000 through the J&K Reorganisation (Adaption of State Laws) order, 2020.
According to the amendments, Property Tax shall be levied on all lands and buildings or vacant lands within Municipal limits.
According to the notification, rules for Jammu and Kashmir Property Tax Act 2000 were notified to facilitate the imposition of property tax across municipal areas in the Union Territory.
It may be recalled that the Government decision was communicated to Principal Secretary of Housing and Urban Development Department by J&K Chief Secretary through official memo in January 13 this year.
The Administrative Council approved the proposal with the direction that the proposed Property Tax, which will take effect on April 1, 2023, shall be levied at half of the proposed formula.
As per the rules of notification, a person liable to the property tax shall be liable to furnish to the officer authorised in this behalf particulars of property and tax due by May 30 financial year. Second instalment of tax shall be furnished by November 30 along with proof of receipt of first instalment.
In case of failure to pay tax, penalty of Rs 100 or one per cent will be imposed, it said, adding the maximum penalty shall not exceed Rs 1,000.
There is a provision for inspection, assessment and reassessment in the Act. There is a provision for appeal to be made to the director of local bodies until the board in this direction is set up, it said.
The Rules define the procedure for calculation of property tax.
According to the Rules, the Taxable Annual Value (TAV) of a property under the Municipal Act-2000 and the property tax due thereon for a financial year shall be calculated in accordance with a formula given in schedule-I to these rules.
The Rules stated that the property tax on residential property would be 5% of the TAV while that of non-residential property be 6 % of Taxable Annual Value.
The Property Tax calculated in respect of a building shall hold for a block of three years unless any change to such calculation is necessitated on account of the circumstances envisaged in the Act for allowing revision in such calculation, the Rules stated
“The first block shall commence from 1st April 2023, and shall continue to remain in force till 31st March 2026. The blocks shall be similarly calculated thereafter, “read the Rules.
According to the Rules, new buildings coming up after the commencement of the block shall have their Property Tax liability calculated with reference to the 1st day of the relevant block, and irrespective of their having completed three years, their liability to tax shall be calculated anew from the date of commencement of the new block of three years for the Corporation as a whole.
“Where a building is liable to property tax for only a part of the year, the tax due shall be proportional to the number of completed months and parts of month not completed shall be ignored,” the Rules pointed out.
According to the Rules, vacant lands, not appurtenant to a structure/building shall be exempt from Property Tax if there is a Master Plan in force in the area, under which any construction/ development on such vacant land is disallowed or if they have been put to agricultural use
The Rules said that all properties owned by the Government of India / UT Government shall be exempted from payment of property tax.
“However, service charge at the rate 3% of the taxable annual value shall be payable to the Municipality in respect of such properties,” the Rules stated.