The Chennai Corporation has adopted a resolution to increase the property tax by 6%.
On Friday, the Greater Chennai Corporation (GCC) Council passed a resolution that authorizes the civic body to increase property tax rates by 6%, amidst a public outcry.
Beginning with the second cycle, which runs from October to March, it is expected to become effective.
The date of implementation will be determined by the administration of the state, according to representatives from the municipal sector.
There was a walkout at the Council meeting between members of the ruling government’s alliance parties, the Left parties, and the opposition party, All India Anna Dravida Munnetra Kazhagam (AIADMK).
They did this when Mayor R. Priya said that “the ayes have it” and that the resolution to raise taxes had been passed.
TN Government order dated September 5 issued to the Chennai Corporation:
The increase is following a government directive dated September 5, sent to the Chennai Corporation Commissioner, Directors of Municipal Administration, and Town Panchayats.
Along with all district collectors, and regional directors of Municipal Administration.
The Tamil Nadu Urban Local Bodies Rules, 2023 in which the yearly hike is mandatory.
According to Greater Chennai Corporation:
GCC officials indicate that the increase is a prerequisite for accessing the Centre’s grants.
As outlined in Chapter 7 of the 15th Finance Commission report: “For all local governments, both urban and rural, the web-based availability of annual accounts for the preceding year and audited accounts for the year prior is an entry-level qualification for grants.”
Urban local bodies must meet an additional prerequisite for grant eligibility.
“The notification of minimum floor rates for property taxes by the respective State, accompanied by a sustained enhancement in property tax collection that aligns with the growth rate of the State’s gross state domestic product (GSDP).”
It further asserts, “Due to historical factors and entrenched interests, property tax revenues remain minimal in India.”
To qualify for funds for urban local bodies in 2021-22, States must duly disclose floor rates and then demonstrate sustained progress in collection in alignment with the growth rate of the State’s own GSDP.
Councilors have objected to the Resolution:
During this time, councilors voiced their opposition to the move, stating that it would have an impact on the working class.
Immediately following the meeting, AIADMK councilor K. Karthik, who represents Ward 7, stated to members of the media, “The annual 6% increase is not right.”
“During the debate that took place at the Council, Deputy Mayor Magesh Kumaar stated that the Central government has instructed the State administration to implement the increase.”
Mr. Karthik added, “Furthermore, higher authorities asserted that if the orders are not adhered to, it is possible that certain funds allocation from the Centre would not be released. ”
“However, according to the resolution, this is in response to a State G.O. (government order) that was issued on September 5 and demands an annual increase in property tax of 6%.”
“It is the responsibility of the Central government to take responsibility for this action, which was taken solely by Dravida Munnetra Kazhagam. ”
“Yet, if it is the Centre that is making the request, then both the Centre and the State are in the wrong for causing the increase,” he asserted.
Rates are established by taking into consideration the location, the kind of property (whether it be residential, commercial, or unoccupied land, for example), and the built-up area.
For example, private buildings are taxed at ₹2.50 to ₹4 per square foot in the Central region, which includes places like T. Nagar, Egmore, and Nungambakkam.
Business buildings, on the other hand, are charged at ₹5 to ₹12 per square foot.
Residential rates could go up from ₹2.65 to ₹4.24 per square foot if the planned 6% increase goes through.
However, business rates might go up to ₹5.30 to ₹12.72 per square foot.
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