FKCCI opposes guidance value-based property tax

Bengaluru: The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has opposed the BBMP’s draft notification that proposes a guidance value-based property tax computation system. 

Stating that the new rule is "complicated and difficult to understand", the FKCCI demanded an extension of the time to submit the objections by another 30 days. 

In a letter to BBMP Chief Commissioner Tushar Girinath, FKCCI president Ramesh Chandra Lahoti asked for retaining the existing self-assessment scheme. 

"The new system proposes to revise the tax with an annual 5% increment on top of the regular increase of guidance value by the state government. This will cause a heavy burden,” Lahoti said. He also opposed the increase of tax by 20% annually until it aligns with the new rates. 

"The calculations made for property tax in respect of land for residential, non-residential, industrial and star hotels — fixed at 0.1%, 0.25%, 0.5% and 0.75%, respectively — is without any scientific study or basis. Similarly, for the calculation of tax for the buildings, the tax is based on the construction cost at Rs 1,500 for residential, Rs 2,000 for non-residential, and Rs 4,000 for star hotels.

"We strongly recommend withdrawal of the notification and retain the existing scheme for property tax for the benefit of citizens,” he said. “Do not undo the self-assessment scheme that was done with a lot of scientific effort."