Srinagar, Feb 21: The Jammu Kashmir administration Tuesday announced the imposition of Property Tax from 1st April 1, for which official notification was issued by the Housing and Urban Development department.
As per officials, property tax is being levied across the world by Municipalities to augment their resources. J&K was the only State/UT in the country which did not have.
“With poor finances, the ULBs across the UT were not able to deliver to their fullest! The revenue from other sources accounted for less than 15% of their operational expenses. Where are the funds for development available? Do we wish to remain entangled in the low revenue, low service level spirals? Was any case for not collecting it in J&K? Certainly not!,” the officials said.
As per officials, the Property Tax is proposed to be levied at 5% of Taxable Annual Value (TAV) of the Property in case of a Residential Property and at 6% of the Taxable Annual Value (TAV), in case of Non-Residential Property.
“Infact, Tax rates, even in the Corporations are one of the lowest in the country, almost half that of Himachal, and one-fourth to one sixth, overall, of other progressive States like Gujarat Maharashtra and Karnataka, and Delhi,” he said.
Briefing about details, again tax rates are 25% lower in the Municipal Councils, and 50 % in Municipalities. Moreover, it is progressive. Residential houses up to a buildup area of 1000 sqft have been exempted.
“Smaller assets are being taxed at lower rates. The taxable annual value has been linked to circle rates – lower the circle rate, lower is the tax liability! Further, weightage to age of property, use type and construction type etc is used to arrive on Annual Taxable value in a more comprehensive manner,” he said.
Citing examples, the official said if an owner of a residential bungalow over a kanal of land in a posh colony of Gandhinagar in Jammu and Raj Bagh in Srinagar, with the value of their assets being more than five crores, is required to pay Rs 500/- pm, is it unreasonable? Or is it unreasonable to charge Rs 100/- pm or even less, from a 3BHK apartment owner.
Similarly, all places of worship, including temples, masjids, gurudwaras, churches, ziarats, etc are exempt from payment of property tax.
As per officials similarly, small commercial establishments especially shops upto size of 100sqft and 200 sqft are also provided relief with very minimal Tax implications. It is pertinent to mention that most of the shops especially in neighborhood areas and old markets fall in this category.
The officials said the Property Tax is a robust and effective system of local self-government is foundational to the effective functioning of a democracy.
“A fundamental enabling condition for such a system to exist is to have adequate finances at the disposal of the institutions of self-government, and the more such finances are mobilized at the local level by these governments, the better for their effective functioning,”
“One of the essential pillars of municipal financing the world over is property taxes. The government of India and the Finance Commissions set up by it have been strongly recommending tapping this resource from time to time,” he said.
“It is with this background, and with an intent to strengthen out ULBs and ramp up the urban development for the betterment of common masses, the Government has decided to impose property tax in the Union Territory of Jammu and Kashmir,” officials said.
Regarding usage of collected monies by Corporations, the official said the monies will be collected by the ULBs, retained by them and then used for their development needs. If tax is being collected from the people and spend only for their betterment, improving their quality of life, he said.
“As Property Tax is to be levied annually and can be paid in two equal instalment it will not be burdening common citizen. Further, as per Act 10% rebate can be availed by early submission of Property Tax,” the official said.
Regarding the benefits of the new tax policy, the official said it will help municipal bodies to generate revenue for better municipal services with minimum Tax implications to residents. Better municipal services are expected to attract more investment and encourage more people to set up businesses in the J&K, he said.
“Revenue generated from property taxes will be used to improve infrastructure, and significantly enhance the quality and levels of being services provided by Municipal bodies. Let us all be a part of this new Urban Renaissance J&K is witnessing,” the official said.
Earlier in 2020, in an order, Union Home Secretary Ajay Kumar Bhalla issued several amendments to the Jammu and Kashmir Municipal Act, 2000 and Jammu and Kashmir Municipal Corporation Act, 2000 carried through the Jammu and Kashmir Reorganization (Adaptation of State Laws) Order, 2020.
JK govt to impose property tax from April 1
As per the official notification, in the exercise of the powers conferred by Section 71A of the Jammu and Kashmir Municipal Act, 2000 (hereinafter referred to as the Act), read with Sub-Section 1 of Section 65 and Sub-Section 1 of Section 73 thereof, the Government hereby notifies the following rules for levy, assessment, and collection of property tax in the Municipalities and Municipal Councils of Union Territory of Jammu and Kashmir.
“These rules shall be called Jammu and Kashmir Property Tax (Other Municipalities) Rules, 2023. These shall come into force from 1st of April, 2023.”
Manner of Calculation of Property Tax: Taxable Annual Value (TAV) of a property under the Act and the property tax due thereon for a financial year shall be calculated in accordance with the formula given in Schedule-l to these 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.
Procedure for assessment and collection of property tax: The procedure prescribed in Chapter VI of the Act, except insofar as it relates to the calculation of the tax due on a property, shall regulate the assessment and collection of property tax.
Form of return under sub-section 5 of Section 73 of the Act: A person liable to property tax shall furnish to the Executive Officer or any officer authorized by him in this behalf the particulars of the property and the tax due thereon in Form-1 by 30th May of the financial year to which the return pertains. It shall be accompanied by a proof of payment in Form-2.
Acknowledgment of filing of return shall be in Form-3. A copy of the acknowledgment along with the proof of payment of the second installment of tax shall be furnished by 30th November in cases where the payment is made in two installments.
Penalty for delay in filing of return: Failure to file return in due time, unless prevented by sufficient cause, shall, without prejudice to the interest due for delay in payment, make the person from whom it is due liable to a penalty of Rs 100/- or 1% of the tax due, whichever is higher, for every month of default. The maximum penalty shall not exceed Rs 1000/-.
Notice for inspection: The notice in terms of sub-section 8 of Section 73 of the Act shall be in Form-4 and the date of inspection shall, unless there are reasons to recorded in writing for giving a shorter notice, not be less than 14 days from the date of notice.
Notice for assessment on best judgment basis: The notice in terms of sub-section 9 of Section 73 of the Act shall be in Form-5clearly mentioning the liability of property tax proposed to be determined and the basis thereof, and the date of hearing shall, unless there are reasons to recorded in writing for giving a shorter notice, not be less than 21 days from the date of notice.
Notice for re-assessment: The notice in terms of sub-section 10 of Section 73 of the Act shall be in Form-5A clearly mentioning the additional amount of property tax proposed to be levied and the basis thereof, and the date of hearing shall, unless there are reasons to recorded in writing for giving a shorter notice, not be less than 21 days from the date of notice.
Notice of demand: The notice of demand in pursuance of assessment or reassessment under sub-section 11 or sub-section 13 of Section 73 of the Act, as the case may be, shall be in Form-6.
Appeal: Till such time the Jammu and Kashmir Property Tax Board in terms of the Jammu and Kashmir Property Tax Board Act, 2013 is constituted, the reference thereto in Section 90, 91and 92of the Act shall be deemed as a reference to the Director Urban Local Body of the concerned division.
Exemption from payment of property tax: Vacant lands, not appurtenant to a structure/building shall be exempt from property tax if there’s 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 as per 6- monthly cropping surveys of the Revenue department.
Similarly, all the properties of the Municipality and all places of worship, including temples, masjids, gurudwaras, churches, ziarats, etc and cremation and burial grounds shall be exempt from payment of property tax.
All properties owned by 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 Jammu Kashmir administration has also notified the formula for the levying of Property Tax in Jammu Kashmir region. It said, Property Tax on Residential Property = 5% of Taxable Annual Value (TAV) Property Tax on Non-Residential Property = 6% of Taxable Annual Value (TAV).
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