Strict action against property tax evaders

Strict action against property tax evaders

Large-scale evasion of property tax by various clubs in South Delhi has been unearthed, the South Delhi Municipal Corporation (SDMC) said, adding that the defaulters will face action.

 SDMC Mayor Shyam Sharma on Sunday said that investigations by Assessment and Collection Department of the corporation has revealed that most of these clubs are not paying correct due amount of property tax.

The main areas where tax payment has been suppressed is the commercial use of various portions of the club and non-inclusion of vacant land of the clubs in the annual value of the property.

The vacant land is liable for property tax under the Unit Area Method.  The mayor said that most of these clubs situated in South zone have already been investigated.

 “It is found that Panch Shila Club has not included in its Returns around 5 acre of land used by it for parking, commercial functions, tennis courts and badminton courts, etc.  The total demand outstanding against this club is approximately Rs 3 crore upto March 31, 2016,” said a statement by the civic agency.
 
 Similarly, the outstanding demand against other clubs located in South zone is: Rs 74.99 lakh against Anand Niketan Club, Rs 60.75 lakh against Safdarjang Enclave Club and Rs 76.76 lakh against Sarvodaya Enclave Club.

 In Janakpuri Club, the demand outstanding is Rs 19.71 lakh.  Investigations in the cases of other clubs situated in West, Najafgarh and Central Zones of the SDMC, are in progress.

 “The Assessment and Collection Department plans to target all such clubs to recover property tax dues together with interest and penalty, in the coming days,” said Additional Commissioner (Taxes)  Ram Mohan Singh, adding that as per provisions of the Delhi Municipal Act, property tax is levied in respect of the club property, including built-up portion as well as vacant land which is used for tennis court, badminton court, holding parties, private functions and parking for members or their guests.
 
 These clubs claim that the land has been allotted to them on lease or licence basis and the owner of the land is the Central Government, DDA or Land and Development.

 However, Ram Mohan Singh stated that even having possession of the land on lease or licence basis will not exempt the vacant land from taxation, as per section 120(2) of DMC Act which provides that where the land has been let for a term exceeding one year and the tenant has built upon such land, the prope-
rty tax is payable by such tenant.

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