Tax on gram panchayat properties to go up

Owners of non-agricultural properties on the outskirts of Bengaluru and other cities will have to shell out more as the state government has directed gram panchayats to revise property tax rates and ramp up tax collection.

The Bengaluru Urban district has 95 gram panchayats that are empowered to levy taxes on residential, commercial, industrial properties as well as vacant plots, hoardings, mobile towers among others. Several commercial and industrial establishments, including IT services major Infosys, fall under gram panchayat limits.

The government has taken serious exception to the fact that 71 out of 95 gram panchayats in the city district have not revised their tax rates for the past four years, whereas they are required to revise rates once in two years. Also, gram panchayats in Bengaluru Urban achieved a tax collection efficiency of just 49% — authorities collected only Rs 92.9 crore against a total demand of Rs 189.61 crore.

“Committees were formed under the chief executive officer to guide every gram panchayat on tax revision and collection. Still, tax collection is lagging. The government is of the opinion that this is because of the inefficiency of the officials,” Rural Development and Panchayat Raj (RDPR) principal secretary L K Atheeq has stated in his letter to all gram panchayat chief executive officers.

The annual tax rate levied is up to 0.10% of a residential property’s original value, 0.20% of a commercial property’s value, up to 1% of an industrial property’s value and so on. A gram panchayat is also allowed to collect cess on the total tax collected — education (10%), health (15%), library (6%) and beggary (3%).

Karnataka has 6,024 gram panchayats, of which only 1,421 had revised tax rates once every two years, a recent review found. “This is a top priority for us. We want gram panchayats to raise their own resources,” RDPR Minister Krishna Byre Gowda told DH.