Separate property tax for industries in Karnataka soon

The Karnataka Cabinet on Thursday decided to amend municipal laws to create a separate slab of property tax for industries and industrial areas, sources said.

Taxing industries separately was a demand from various industry bodies as they argued that the property tax currently being levied at commercial rates is very high. Industries Minister Murugesh Nirani is said to have pushed for this.

Section 108 of the Karnataka Municipal Corporations Act, 1976 and Section 94 of Karnataka Municipalities Act, 1964 will be amended to insert a separate property tax slab for industries and industrial areas developed by the Karnataka Industrial Areas Development Board (KIADB) and the Karnataka State Small Industries Development Corporation (KSSIDC) coming under municipal limits. The separate slab will not be applicable to Bengaluru.

In the 2021-22 Budget, the then Chief Minister BS Yediyurappa had promised a new property tax slab in urban local bodies (ULB) "to encourage the establishment of industries in the state".

At present, civic bodies levy property tax on industries based on rates fixed for commercial buildings. The proposed tax slab for industries will have rates lesser than what is levied on commercial buildings, sources said.

Though ULBs will suffer financial losses due to lower taxes, it would also translate to better tax collection due to improved compliance and lesser default by industries, sources said.

The amendments will also offer property tax concession to buildings and lands owned by state and central governments being used for industrial purposes.

A separate slab of property tax for industries at lesser rate than commercial category shall encourage establishment of more industries leading to the creation of more employment opportunities for locals, sources said.

Inam Abolition

The Cabinet also cleared a Bill providing one year extension for re-grant of Inam land. The Karnataka Certain Inam Abolition and Certain Other Laws (Amendment) Bill will help several farmers who had not applied for regularization of their cultivated land since 1975. Due to the delay in regularization, farmers are facing problems in availing bank loans. They are also not eligible for compensation in case the land is acquired for various projects, sources said. Inam lands are those that were gifted to persons and organizations by the erstwhile rulers.

An amendment to the Karnataka Land Revenue Act was also approved by the Cabinet, allowing government surveyors to issue 11E sketches. "Earlier, only licensed surveyors were allowed to issue 11E sketches," a source said.

Check out DH's latest videos: