Property Tax Capped At 5% For Residential, 6% For Non-Residential
Srinagar- In a move that will have far reaching consequences, the Union Territory administration on Tuesday announced imposition of property tax in Jammu and Kashmir from April 1, this year.
An official order issued today read that in exercise of the powers conferred by Section 71A of the Jammu and Kashmir Municipal Act, 2000, the government has framed rules for levy, assessment and collection of property tax in the Municipalities and Municipal Councils of Jammu and Kashmir.
These rules have been called Jammu and Kashmir Property Tax (Other Municipalities) Rules, 2023. The Property Tax on Residential Property will be 5% of Taxable Annual Value (TAV), while the Property Tax on non-Residential Property will be 6 % of Taxable Annual Value (TAV).
The order has, however, exempted all the properties owned by Central and UT Government from payment of property tax. Only service charge at the rate 3% of the taxable annual value has to be paid to the Municipality in respect of such properties.
Similarly, all the properties of the Municipality and all places of worship, including temples, mosques, gurdwaras, churches, shrines, etc and cremation and burial grounds have been exempted from payment of property tax.
The government has also exempted vacant lands, not appurtenant to a structure/building from property tax if there’s a Master Plan in force in the area, under which any construction/development on such vacant land is disallowed or if they have been put to agricultural use as per 6-monthly cropping surveys of the Revenue department.
The order was issued by H. Rajesh Prasad, Principal Secretary to the Government Housing and Urban Development Department.
It will be for the first time that such a proposal will be framed where the residents have to pay property tax on residential and commercial establishments.
Pertinently, the J&K was the only state in the country which was exempted from property tax. However, post abrogation of Article 370, the central laws were extended to the newly created UT and all the laws became applicable automatically.
It may be noted that in October 2020, the Ministry of Home Affairs (MHA) empowered the J&K administration to impose property taxes through the municipal corporations, municipal councils and municipal committees in the Union Territory. However the move was strongly opposed by the regional political parties prompting the government to keep the proposal on hold.
In an order, Union Home Secretary Ajay Kumar Bhalla issued several amendments in the Jammu and Kashmir Municipal Act, 2000 and Jammu and Kashmir Municipal Corporation Act, 2000 carried through the Jammu and Kashmir Reorganization (Adaptation of State Laws) Order, 2020.
According to a Srinagar Municipal Corporation (SMC) Corporator the SMC will call a session and will have the deliberations on the order.
“The SMC is the executive and implementing agency of the property tax. We can call a council and seek an amendment to this,” corporator Danish Bhat told Kashmir Observer.
He said the proposal was supposed to go through the SMC to the Government but now without informing SMC, the government has come up with the order.
The notification further says that a person liable to property tax shall furnish to the Executive Officer or any officer authorized by him in this behalf the particulars of the property and the tax by 30 May of the financial year to which the return pertains.
“It shall be accompanied by a proof of payment in Form-2. Acknowledgment of filing of return shall be in Form-3. A copy of the acknowledgment along with the proof of payment of the second installment of tax shall be furnished by 30 November in cases where the payment is made in two installments,” the notification reads.
“If any person fails to file return in due time, unless prevented by “sufficient cause”, will have to the interest due for delay in payment, make the person from whom it is due liable to a penalty of Rs 100/- or 1% of the tax due, whichever is higher, for every month of default. The maximum penalty shall not exceed Rs 1000/,” it adds.
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