Issuing a statement regarding property tax payable by Mumbai residents, BMC administrator and commissioner I S Chahal has said that there is no property tax increase in the current financial year and clarified that actual property tax bills shall be raised mentioning only the payable amount.

BMC has been sending provisional property tax bills to the taxpayers for FY 2023-2024 with a 15%-20% hike as per the five year rule. Due to legal complexities involved in the BMC’s retrospective tax assessment, the bills have been delayed.

Chahal said that the terms “bills payable’ and “bill amount’ as mentioned on the BMC website had created confusion amongst the taxpayers.

“Regarding the issue of property tax due to BMC for the financial year 2023-24,from the taxpayer citizens, although no hard copy of bills addressed to tax payers till date have been issued, however in light of Hon’ble Supreme Court’s recent order with respect to property taxation and consequent legal opinion obtained by property tax department, BMC the terms “bill payable” and “bill amount” were used on the BMC website which has created certain amount of confusion in the minds of tax payer citizens in general  and many stake holders in particular,” said the statement.

“Therefore, it has been decided that in order to avoid any confusion in the minds of taxpayers citizens, the actual property tax bills shall be raised mentioning only the payable amount .This payable amount shall be exactly equal to amount payable for the financial year 2022-23, thereby ensuring no property tax increase in current financial year for all taxpayers citizens of Mumbai,” said Chahal.

BMC implemented capital value system (CVS) in 2012 for calculating property tax and levying new rates in a retrospective manner from 2010 onwards. In 2019, the Bombay High Court set aside certain rules regarding retrospective taxation. Later the Supreme Court directed BMC to frame new rules and issue fresh bills to taxpayers possibly resulting in refunding thousands of crores of rupees to tax payers who paid property bills on the basis of the CVS between 2010-2012.

Besides refunding / adjusting the excess amount collected from the citizens in future bills, the BMC also has to rework the capital values of all the properties which is onerous task for the civic body. Citing inability to refund such a hefty amount, the civic authorities have requested the state government to make amendments to the BMC Act. As the matter is yet to be sorted, it has not send property tax bills this year and instead sent provisional bills for April 1 to September 30 and October 1, 2023, to March 31, 2024.

A senior civic official is earlier quoted to have said the property tax increases every five years, yet there has been no increase in tax since 2020.The BMC is now increasing property tax between 2023- 2025 and excess amount collected from the citizens will be refunded or adjusted in future bills. Tax for properties up to 500 sq ft has already been waived.