Tuesday, May 28, 2024

Paying For Possession


The Ministry of Home Affairs has delegated the authority to impose and collect the property tax on urban and suburban areas and people are confused about how and when it will start operating and what impact it will have on the lives in a conflict zone, reports Tahir Bhat

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Ariel view of Srinagar city during the lockdown in view of coronavirus on Saturday 4 April 2020. KL Image by Bilal Bahadur

Ahead of becoming smart cities, Srinagar and Jammu will have to first list their possessions and pay for it. Under the new regime, in fact, all the urban and semi-urban areas in Jammu and Kashmir will have pay property tax, the rate and system of which the local municipal bodies will decide.

The decision to levy the tax was the outcome of the MHA decision making that invoked inherent tax clauses in various municipal laws to enable the municipal bodies to open a new window of income. The tax cannot exceed a specific percentage of the net value of the property but initially, it is expected to be minimal so that it gets some acceptability. This tax can be imposed on buildings, lands and vacant lands.

The law requires the constitution of Jammu and Kashmir Property Tax Board (PTB) to oversee the overall system of the brand new tax in the brand new UT. MHA has already empowered the UT administration to designate municipal authorities to impose the tax on all properties falling within their jurisdictions.

Last Attempt

In March 2011, the NC-Congress regime led by Omar Abdullah did legislate a law for levying the tax in urban areas. Justifying the requirement for the tax, the then Deputy Chief Minister Tara Chand said that the bill will bring “uniformity and transparency in property tax assessment”. The bill paved way for setting up of the PTB to “enumerate all properties in municipalities in the state, develop database, review property tax system, recommend modalities and collect taxes.”

Tara Chand said the passage of the bill is a compulsion. “For accessing the General Performance Grant Component of the Thirteenth Finance Commission, the state has to set up of the PTB that will advise the government on various matters relating to the property tax system,” he said.

However, the idea initially was strongly criticised by the opposition. Engineer Rashid, the then member, who is now in jail, termed the bill “harsh and anti-people measure” and questioned, “why people will pay tax just for sitting in their homes.”

“Before passing of the bill, the government should have qualified on whom property tax should be imposed?” the then PDP lawmaker Abdul Rehman Veeri said. “We are not against imposing property tax on those who have huge wealth but poor people living in towns should not be brought the purview of this law.”

The bill had been introduced in the earlier session and the opposition to it led the coalition government to send it to the select committee. After the committee gave its suggestions, it was re-introduced. The bill was passed by the house despite the opposition insisting the Jammu and Kashmir was passing through adverse economic climate because of the overall situation. The lawmakers highlighted the frequency of hartals and curfews to offer an idea about how the economy of the place is merely surviving.

With Jammu and Kashmir no more a state and the assembly, though absent, completely disempowered, the MHA has invoked its rights to impose the tax. The tax imposition comes at a time when the overall economy is in shambles and people are facing difficulties to manage their loans.

New Amendments

Though the municipal bodies will take their time to decide about the systems and the tariffs, the amendments in the Jammu and Kashmir Municipal Act, 2000 suggest that the tax shall be levied “at such percentage not exceeding 15 per cent of the taxable annual value of land and building or vacant land or both”. All calculations will ensure the yearly depreciation is accounted for on yearly basis. There is a provision of seeking a lump sum amount on yearly basis. Buildings in which the owners will be residing will get 25 per cent rebate.

Property tax tariffs will be reviewed every three years. The owners of the land or built properties will have initiate the process of self-assessment and submit it to the municipal officers under the amendments to the law.


A public finance expert said that the tax is not new and the erstwhile state had its own law. “The state despite having the law did not delegate the authority to impose and collect the tax to the municipalities,” the expert said. “Now there is no state and the UT administration is delegating that authority to the municipalities.” The experts said the UT administration can raise a good amount from this tax.

The exact tariffs are still not known but the political grapevine is that this will be implemented in all the urban and semi-urban areas. “We are in a situation in which the people face serious problems in constructing their homes because the arbitrary and illegal systems are in place to inflate the costs of the construction material,” Waheed Parra, a PDP leader said. “With this Jaziya, the government is penalising our existence and inheritance,” Parra said they are imposing on us the systems that are in vogue in India’s political and commercial capital while denying us the basics that Delhi and Mumbai enjoy.

Tax experts said that they have no idea about the tariffs and the system but the tax will help in the proper valuation of the properties in the coming days.

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Tahir Bhat
Tahir Bhathttps://kashmirlife.net/
With more than 7 years of experience in Journalism, Tahir Bhat is an Online Editor at Kashmir Life. Tahir has reported on Human Rights, Economy, Polity, Society.

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