Proposed hike in property tax by NDMC peeves residents

Hundreds of residents of Golf Link Society, Jorbagh, Chanakyapuri and Babar Road are planning to knock the Supreme Courts door after they received a notice issued by the New Delhi Municipal Council (NDMC) on March 28 for depositing a hefty sum as property tax as per the proposed amendment to the Assessment List for the year 2018-2019.

The residents of over 800 kothis and bungalows in the area, who paid Rs 50,000 to Rs 1 lakh as property tax annually for 2017-18 by the unitary method introduced by the NDMC in 2009, will now have to shell out Rs 30 lakh to Rs 40 lakh as property tax, depending upon the per square foot covered area of the property at a comparable rent of Rs 126.30 per square foot per month as per the NDMC Act, 1994 if the provisional proposal of house tax 2018-19 will be amended.

The NDMC notice, a copy of which is with the IANS, said: "This is to inform you that the assessment list for the year 2018-19 is proposed to be amended as per the details and reasons given hereunder and if you wish to file any objection in this connection, you may submit your objections in this office in writing so that is received in this office not later than 35 days from the date of receipt of this notice. If no objection is received with the aforesaid time, it shall be presumed that you have no objection to the proposed amendment." 

The notice, issued to a particular property in Golf Link, said: "As per provision U/S 63(1) of NDMC Act-1994, Comparable Rent @ Rs 126.30 per square feet for per month is being fetched from the property." 

Majority of the residents in Golf Link Society, including 110 senior citizens who have been there since the society was established in 1957, have been under immense pressure after receiving the NDMC notice.

A resident of Golf Link said on the condition of anonymity: "In 2009, when the unitary method was introduced by the NDMC, the property was valued at Rs 1,000 per square metre annually. This meant that if we had a property of 743 square metre (8,000 square feet), its value would have been Rs 7,43,000 for which 20 per cent amount was to be given as property tax in a slab of below Rs 10 lakh, which came to Rs 1,48,000. A further rebate of 50 per cent was given if the figure was less than Rs 5 lakh. So the effective property tax came to Rs 74,000."

"But now, as per the proposed amendment by the NDMC, it is likely to come up with a proposal as per the given notice that for 8,000 square feet (743 square metre) of covered area, the annual value would be calculated at a comparable rent of Rs 126.30 per square foot per month, which would come to Rs 1,21,24,800," he said.

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"As per the new NDMC proposal, the property tax is further divided into three slabs -- for the first slab of up to Rs 10 lakh, 20 per cent property tax would be taken; for the next slab of Rs 10 lakh to Rs 20 lakh, 25 per cent tax will be taken; for the next slab of above Rs 20 lakh, 30 per cent cent will be taken as property tax. So for a property valued at Rs 1,21,24,800, the effective property tax will come to around Rs 40 lakh," the Golf Link resident added.

The residents of Golf Link are in touch with the advocates to challenge NDMC Chairman Naresh Kumar against the proposed amendment which they termed as a "tughlaqi farmaan" (dictatorial order). 

The residents also alleged that there were around 200 NDMC flats in the Golf Link Society, from which no property tax was generated. 

The residents said that they had filed a petition in the Delhi High Court in 2016 when property tax was hiked by Rs 1,800 per square metre. The court at that time had termed the NDMC order as "null and void."

Later the NDMC challenged the high court verdict before the Supreme Court. The Supreme Court, in its order dated January 22, 2019, quashed the NDMC appeal and said that house tax collection should based on the unitary method. 

When contacted, Virender Singh, Director of Tax, NDMC, refused to comment on the matter.