Corpn defers plan to impose penalty on property tax dues

According to a senior official of the Corporation, it was decided to imposed penalty from the next financial year rather than doing it from the current half-year that commenced on Tuesday.

Earlier, the civic body had sent a proposal to the State government seeking permission to impose a penalty of two per cent of the total property tax due (on compound interest basis). It had also suggested providing five per cent incentive to those who pay tax on time from the current half-year.

The Corporation rules mandate property owners to pay tax within 15 days of every half-year – before April 15 and October 15.

When asked the reason for postponing the stringent action against defaulters, the official said the government authorities have sought more clarity before implementing the penalty and incentive clauses. “This has delayed the implementation,” the official added. Had the civic body received the government’s nod, all property owners should have been forced to pay the tax before October 15. There are more than 12 lakh buildings in the city. “While issuing the order to increase property tax rates, the government had also allowed the civic body to collect penalty and provide incentive,” another official said.

The Chennai Corporation had already increased the property tax rates by 50 per cent for residential buildings and 100 per cent for commercial buildings.

The civic body has collected around Rs 607 crore as property tax and Rs 201 crore as profession tax during the first half-year of 2019-2020 that ended on September 30.

Even though the Corporation managed to collect more than Rs 1,002 crore as property tax in 2018-2019, total tax default stood at more than Rs 350 crore.

“While middle-class building owners are paying property tax properly, owners of big properties have huge defaults. Imposing the penalty is the only way to collect tax from them. We will try to implement it from next year,” the official said.