THE TRIPURA MUNICIPAL
(ASSESSMENT AND COLLECTION
OF PROPERTY TAX ) RULES, 2004
PROPERTY TAX- CONCEPT
Property taxation is levied by local governments since ancient
times. property tax constitutes the most important
autonomous revenue source of local bodies especially urban
governments everywhere in the world.
As the state gives right to owners of the property for its
exclusive use, enjoyment possession and disposal of the
property can legitimately tax such properties . In a generic
sense, tax on property can take many forms like tax on land,
houses, wealth etc.
In the context of local finance , property tax is generally used
to mean tax on one basic form of property, namely real
estate i,e land & buildings.
WHY PROPERTY TAX ?
•
In multi label fiscal systems in order to minimize distortions,
according to the principal of fiscal assignment local
government can raise revenues mainly from relatively
immovable property and non distributing tax bases.
•
According to MC Cluskey– the property tax is a unique
mechanism for local revenue generation. Real estate is a
visible immovable property and thus property tax can be well
administered and which is proved as a highly efficient fiscal
tool to mobilize revenue for local bodies.
•
Property tax is a reliable revenue source to local
governments.
•
There is a movement to abolish octroi in India levied on entry
of goods . Thus property tax is the only tax with local base
and can be a revenue productive.
COMPONENTS OF PROPERTY TAX
•
The valuation of land and building is the base for property
tax.
•
The choice of property tax base can be its annual rental
value or capital value or standardised area base tends .
•
Depending on social and political processess or concerns,
different countries adopting different base for property tax
assessment.
•
It should also be kept in mind that the purpose of property
valuation is only to arrive at the relative value of properties
at a given time.
•
The property tax levied as a small percentage of property
value.
TAX COLLECTION SYSTEM
•
Tax collection system consist of enforcement mechanism ,
stringent recovery provisions, penalty provisions which are
found weak in most of the cases.
•
The property tax system historically has used the concept of
Annual rateable value (“ARV”) as the basic taxation derived
from the British system of taxing rentals in a free market.
•
Most of the concerned Acts define ARV as the rent at which
the property might reasonably be expected to be let from
year to year after allowances of certain deduction. e.g cost
of repairs, insurance etc.
•
Service taxes are often levied with property tax. These
services include taxes for water , sewerage, street lighting.
FOCUS AREAS OF PT EFFICIENCY
UNDER RENTAL VALUE METHOD
•
A good property tax structure should –
•
Have a low rate , making it acceptable to the public at large.
•
Minimize discretion and avoid arbitration in assessment of
property tax.
•
Make the process of assessment and collection transparent
and simple.
•
Ensure equity among classess of tax payer’s /property owners
by fixing the assessment in a uniform manner.
•
Facilitate self assessment of property tax by property
owners/ occupiers.
•
Evolve a specific method of levying property tax.
•
Delink the provision of rent control Acts from property tax
assessment.
ASSESSMENT OF PT BY AMC
In pursuance of provision of Section 192 & Section 213 of the Tripura Municipal
Act,1994, the rule called The Tripura Municipal (Assessment and collection of
property tax ) Rules,2004 has been introducted on 7th December,2004.
•
According to the provision of the above mentioned rule-
•
AMC has taken following steps -
•
Fixed the ARV for vacant land –Rs 1400/-(uniform rate)
•
Rate to fix ARV



• M.building:
For Residential @ Rs. 0.60 psqf
For commercial @ Rs. 1.80 psqf
 S.P. building:
For Residential @ Rs. 0.50 psqf
For commercial @ Rs. 1.50 psqf
ASSESSMENT OF PT BY AMC
Fraim building:
 For Residential @ Rs. 0.40 psqf
 For commercial @ Rs. 1.20 psqf
Katcha building:
 For Residential @ Rs. 0.30 psqf
 For commercial @ Rs. 0.90 psqf
Water tax:
M.building:
 For Residential @ Rs. 480/Yr
 For commercial @ Rs. 3000/Yr.
•
•
•
Rate of property tax:-12 % (5%-tax on property, 5% on conservancy,2%
on street light)
Rate on service Charge-9%.
ASSESSMENT PROCEDURE
Say one citizen occupies a M.building of 1800 SFT plinth area –
Firstly one third of 1800 SFT will be deducted straightway as a standard
deduction to find out taxable area> 1800-600= 1200 SFT
> Then the amount will be multiplied by 0.60 to fix RV
> RV= 1200 x 0.60 = Rs 720.00
>ARV= 720x12 = Rs 8640
> PT = Rs 8640 x 12% = Rs 1036.80 = Say Rs 1037.00
> WT= Rs 40 X 12= Rs 480.00
> Total Tax = Rs 1037 + Rs 480 = Rs 1517.00
Similar procedure will be followed in other type of building.
In case of service chargeSay there is a hospital building of 15000 SFT
ASSESSMENT PROCEDURE
Then ARV of the building will be –
> 15000 X 0.60x 12= Rs 1,08,000.00
Service Charge would be = 108000 x 9% = Rs 9720.00 P.A
•
Service Charge shall be levied on Banks, Postal service & Public offices,
Medical Institution, Factories & Industries owned by the Government &
PSU. In other cases, PT shall be levied @ 12% or 7% as per decision of
the ULB’s .
•
Rebate may be allowed on ARV under following cases-
•
10% for the building below 25 years of age
•
20% for the buildding above 25 years of age.
•
10% if the building is using by the owner.
•
AMC is giving PT exemption(10%) to the citizen during April of every year
for advance payment.
•
Penalty @ 10% is being imposed by the AMC in case default cases.
COLLECTION OF P.TAX
•
Collection of AMC during last 2 Financial years are as below:-
•
2012-13
- Rs 2.36 Cr.(approX)
•
2013-14
- Rs 3.21 Cr.(approx)
•
Growth
- 36 %.
•
Policy:- Survey of each household shall be done by the
surveyor/ enumerator in every year.
•
All commercial holdings shall be assessed every year keeping in
mind the rapid growth of Nagar.
•
Demand Notice shall be issued showing the figures of taxes in
FORM-D.
•
In case of failure to realize PT, action shall be taken as per
provision of Section 215(2)of the TM Act,1994.
PROVISION OF SEC. 215 OF THE TM ACT,1994
On failure to pay PT within a period of three months from the date when
payment was due, the Municipality may take one or more of the following
actions to enforce recovery of such taxes:i)
Disconnect the water connection, if there is any such connection provided
by Municipality to the holding;
ii)
Request the power department of the Sate Government to discontinue
power supply , if there is power connection to the holding;
iii) File application in the court of judicial magistrate having local jurisdiction,
,for realization of tax from the defaulter by issuing distress warrant for
sale of moveable properties of the defaulter in such manner as may be
prescribed;
iv) File application in the court of Certificate Officer under Tripura Public
Demand Recovery Act,2000 (No.7 of 2000);
v)
If the defaulter is an employee under the Central or any state Government
for public Section undertaking, intimate the disciplinary or controlling
authority of that employee about the default with request to take
appropriate step for recovery of the Municipal dues from his salary and
allowances for other financial benefits of his service.
THANK YOU