If MCD’s proposed budget for 2010-2011 is passed, Delhiites will have to pay more property tax on residential and commercial properties. According to the budget, a 5% increase has been proposed on the house tax rate.

The increase is much more for commercial properties. For rented commercial properties, tax has increased from 10% to 20%, which is a 100% increase in the annual amount being paid as property tax, according to traders. The increase for self-occupied commercial properties is 5% – from 10% to 15%. MCD has also proposed to bring some commercial enterprises under a special category and charge 20% tax on them. Said MCD commissioner K S Mehra : “Threestar hotels, malls, air-conditioned gyms and clubs which have a swimming-pool will be brought under a separate category.

We want to provide Delhiites with better services which is why we introduced new taxes besides increasing existing tax rates.” Added an official: “The revenue earned by such business enterprises is much higher than other commercial establishments and they should pay tax in accordance to their earnings.”Meanwhile, for residential properties, the 5% increase will mean that residents living in colonies coming under A to E categories (posh colonies) will pay 15% tax instead of 10%. For those colonies coming under F to H category of MCD’s property tax, tax rate will go up from 6% to 11%.

Those living in DDA flats will have to forego the 10% rebate that they were so far getting. Said Sudhir Kalra, a resident of GK-I:”If I was paying Rs 10,000 as property tax earlier, I will be shelling out Rs 15,000 after the 5% increase. Which means that the amount paid to MCD as property tax has increased by 50%. Why should I pay more when I am not getting anything in return?”The taxes are likely to increase further when MCD comes out with its schedule of taxes for 2010-2011. Said an MCD official: “The third municipal valuation committee still has to submit its report.

It is expected by January. Once that happens, the unit area value charged from each of the eight categories will increase. This move is inevitable since they have not been revised for years. The committee had proposed a 24% rise in the base value earlier this year but the proposal was shot down due to the upcoming general elections then.”While the Congress councillors are not too happy with the proposed increase in taxes and introduction of a new tax, the BJP – which is in power in MCD – refused to comment on this issue. Said leader of House Subhash Arya:”I would not like to comment on this issue.” According to sources in the party, however, the political-brass is not willing to pass the proposal pertaining to levying of professional tax.