Hit By Money Crunch, Hyderabad Civic Body To Re-look At Property Tax Rebates

The civic body in Hyderabad, under immense pressure to provide better infrastructure to its rising population, has been facing a financial crunch. Property tax collections for the body dropped substantially in 2015-16, hitting the corporation's finances.

Now, to revive its financial status, the Greater Hyderabad Municipal Corporation (GHMC) plans to come up with certain measures. PropGuide looks at what this includes:

Encouraging early birds

To encourage timely payment of property taxes, GHMC has launched an 'Early Bird Scheme', under which people who pay the property tax for the financial year 2016-17 before April 30 will get a rebate of five per cent. Property owners are supposed to pay the current year's tax and clear all the pending dues to avail of the benefits of the scheme. On the other hand, property owners paying the tax after July 31 will be required to pay an additional interest of two per cent monthly. The scheme was introduced in FY13-14 and helped increase the civic body's tax collections. This year, GHMC expects to raise over Rs 300 crore through this scheme.

GHMC has also set up Citizen Service Centres and Mee-Seva Centers that will be open from 8 AM to 8 PM to facilitate the tax-collection process. One can make payments at designated bank branches or through the National Electronic Funds Transfer (NEFT) system.

Making it easy

The ruling Telangana Rashtra Samithi had earlier offered many perks to taxpayers. In fact, tax liability of property owners who were paying taxes up to Rs 1,200 annually was reduced to a mere Rs 101. As a result, the corporation suffered revenue loss of Rs 87 crore during FY16, so it may withdraw the policy soon. According to the GHMC records, out of an approximate 13.35 lakh properties, more than five lakh are availing of the benefits under this policy as of now.

Revision on cards

The likelihood of a revision in property tax also gains ground based on the fact that there has been no revision in the tax on residential properties since 2002. During this period, many dilapidated structures in this fast-growing information technology hub have been converted into multi-storey structures. Hyderabad has also gone considerable change during the period and the Municipal Corporation of Hyderabad (MCH) was expanded to include neighbouring municipalities. This led to a variation between taxes collected by the old and new municipalities. The corporations expect to plug this loophole, too, to raise its tax collection.