Jammu and Kashmir government which going to levy property tax, has exempted poor and marginalized people with small houses from paying property tax. The exemption applies to individuals with built-up areas of up to 1000 square feet and will take effect from April 2023.
The government has clarified that the levy of property tax is necessary for urban sector reforms, as urban local bodies (ULBs) require resources to provide multiple civic services. The tax will also improve the financial health of these institutions and create employment.
The tax is proposed to be levied at just 5% of Taxable Annual Value (TAV) for residential property and at 6% of TAV for non-residential property. It is also one of the lowest tax rates in the country. The tax takes into account factors such as the age of the property, usage type, and construction type to arrive at a realistic capturing of the value of the property.
The property tax is progressive in nature, with low taxes on smaller assets, and is linked to circle rates. The lower the circle rate, the lower the tax liability of the owner. Small shops will have to pay a minimal amount of tax. For example, a small shop in the old city area of Jammu with an area of about 200 Sft, which is only 0-20 years old, will be liable to pay tax of only Rs 838 per annum.
The collections from the property tax will be utilized exclusively for developmental activities in respective Municipalities. The property tax paid by people shall be used in their own areas, and the accumulations of the tax money will be collected by the ULBs, retained by them and used for their development needs exclusively.
The payment of property tax shall also facilitate common people in availing various facilities and services through their concerned local bodies with the expenditure of funds collected by levying this tax.
The Chief Secretary has impressed upon the officers to create awareness among the public to remove misconceptions. A helpline for the masses will disseminate the correct information about this matter. A simple ‘Property Tax calculator’ will also be created for people so that they can assess the actual amount they are liable to pay.
The government has emphasized that it is not permitted to direct ULB resources for any other purposes. The property tax paid by people shall be used in their own areas. The tax to be collected from the people shall be spent only for their betterment, improving their quality of life.
The payment of property tax is to be levied annually and can be paid in two equal installments. Further, a 10% rebate can be availed by early payment of the Property Tax.
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The Chenab Times News Desk