Tax reform may not help extended areas

CHENNAI: Greater Chennai Corporation’s move to rationalise property tax rates may not have the desired impact for residents of the city’s extended limits like Ambattur and

Alandur

, as the process is expected to only marginally reduce the gulf in tax rates for the core city areas.

At present, a person owning a 1000sqft residential building in T Nagar may only be required to pay between ₹1,100 and ₹1,400 (depending on the area) as half-yearly property tax. Whereas, for a similar sized property, an Ambattur resident may have to pay twice as much due to the differential rate slabs in these two zones. Hence, the corporation has sought to rationalise taxes in the interest of bringing uniformity across zones.

According to corporation officials, the civic body has zeroed in on two new models of calculation, with the basic factor involved being the area’s guideline value. Sources said that the corporation is undecided on the percentage variable to be calculated on these models.

“A decision on which model will be best suited (for the corporation’s revenue stream) will be taken at a high-level meeting. The idea is not to reduce existing collection but augment revenue,” a corporation official said. The civic body is eyeing a net increase of around 20%-25% in collection of property tax post rationalisation.

Despite a shock result in the R K Nagar bypoll, the ruling AIADMK government is unlikely to dither on pushing ahead with the tax reform, a senior government official told TOI. “The government is keen on improving revenue stream for corporation,” the official said.

But whichever model is put to use, it is unlikely to effect a drop in taxes for residents in the extended limits, the official added. “It is unfair that I have to continue to pay higher rate of property tax. All these years (after merger with city) we paid twice and thrice as much as what a Boat Club resident paid but with no access to proper bitumen roads, storm water drains or streetlights,” said Ravi Kumar, an Ambattur resident.

Across the country, civic bodies in Kolkata and Mumbai too have effected property tax reforms in 2017. While

Mumbai city

’s corporation has resolved to waive off taxes for properties with area less than 500 sqft, Kolkata has implemented a new calculation mechanism that has reduced the current rates.

Meanwhile, the corporation has also forwarded a proposal to hike professional tax to the state government. At present, the civic body collects ₹1,095 twice a year from the salaried class with a half-yearly income of ₹75,000 and above. Sources said the revision would result in professional tax rising to more than ₹1,500.