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Municipal bodies across India need dump truckloads of money to ensure that citizens receive all kinds of services to lead a hassle free life.
So without doubt, it hurts when property taxes, a primary source of revenue for municipal bodies, are not paid by owners.
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Property tax defaulters are a major headache for municipal bodies today and despite notices and cajoling, their numbers just seem to be going up.
Take Bengaluru's BBMP for example. It has an annual budget of INR 10,000 crore and expects 35% (INR 3,500 crore) of that to come in as property tax revenue.
But non-paying, evading and repeat-offending property owners are throwing a spanner in the works each year, resulting in the revenue target skewing slightly towards becoming an annual joke.
In Chandigarh, of around 40,000 commercial property tax payees, only 14,000 had paid the tax, per August 2021 data. 20,000 residential property owners were yet to pay their taxes too.Collection Strategies
With increasing budget deficits and the immense pressure the pandemic has put on civic bodies, writing off property tax receivables is no more an option.
The Gurugram civic body rolled out a zero penalty discounted tax scheme that it ran till September 30, 2021. This has resulted in a significant increase in property tax revenue. However, thousands of payees are yet to wire their dues to the corporation.
Knock Knock, Who's There?
The tax man.
The Nashik Municipal Corporation (NMC) has notched things up a bit higher though. They visited 150 homes which had defaulted on water tax payments and - got 120 of them to pay up a cumulative amount of INR 90 lacs, and axed the water connection to the other 30 homes.
For property tax defaulters, the strategy remains the same and a drive is on, yielding significant good news for the corporation's receivables department.