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Pay property tax or lose assets: Bengaluru civic body

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Pay property tax or lose assets: Bengaluru civic body

BBMP’s deputy commissioner (revenue) Venkatachalapathy M said the Palike enjoys powers to confiscate moveable properties like furniture under the Karnataka Municipal Corporations Act, 1976

BENGALURU: Property tax defaulters, watch out. Furniture and other movable assets in your house or commercial property could be confiscated if you don’t pay taxes even for one year.

N Manjunath Prasad, commissioner of Bruhat Bengaluru Mahanagara Palike, said on Tuesday the Palike will issue notices to tax defaulters from April 1 with a 15-day time to pay up the arrears. “If defaulters fail the deadline, we will confiscate assets from their houses or commercial establishments,” he added.

BBMP’s deputy commissioner (revenue) Venkatachalapathy M said the Palike enjoys powers to confiscate moveable properties like furniture under the Karnataka Municipal Corporations Act, 1976. Immovable properties cannot be seized. A property owner who has not paid tax for the previous year is declared an offender. Our estimates say taxes are due from at least, 20,000 properties from one year to many years. We estimate to net revenues of about Rs 400 crore if defaulters cough up the dues,” Venkata chalapathy said.

Sources said the BBMP was confident of recovering dues this year as most properties have been mapped using the Geographic Information System (GIS) this time. So there’s no room for dispute. “We’ve developed a system where BBMP zonal officials get updates on spatial details of tax defaulters on their smart phones. Until now, our revenue officers were lethargic in identifying tax defaulters. They can’t shirk their responsibility now,“ he added. The BBMP has mapped a total of 18.95 lakh properties with GIS since June 2016, which is higher than the 16 lakh database that the Palike had.

TIMES VIEW

Its time for property owners in Bengaluru who have been evading tax payment all these years to clean up their act. The cash-trapped BBMP’s decision to confiscate movable properties of defaulters is justifiable because the city has about 20,000 properties towards which payment of tax is pending from one year to several years. The failure to crack down on them has proved costly for the Palike which complains of lack of funds for the city’s development. If executed meticulously, an estimated Rs 300 crore to Rs 400 crore could fill up its coffers. Given that BBMP has mapped 18.95 lakh properties using the Geographic Information System, recovering dues will not be a herculean task.

Source: Economic Times

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Regulations

373 Maharashtra Cities To Fall Under PMAY Scheme

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The state of Maharashtra has added 232 cities to the existing 142 which makes it 373 cities under the Pradhan Mantri Awas Yojana Scheme (PMAY).

The officials at the housing department feel that this step will aid the government take up more projects under the PMAY scheme.

Sachin Kulkarni, Builder shared his concerns over the lack of coordination between the department in executing PMAY projects. He said, “This is a good sign. However, the PMO’s seriousness in promoting HFA is diluted by the time it reaches the authorities. Apart from collecting application from interested beneficiaries, nothing has moved on the ground in urban centres. I hope that this initiative moves on fast track”.

Maharashtra CM Devendra Fadnavis recently states that the in order to create more housing stock the state’s Slum Rehabilitation Authority scheme be brought under PMAY so that it can receive the subsidy to create more affordable housing. He clearly mentioned that the government intends to create more housing stock and it was taking various initiatives and making policy changes for it.

Also Read- Affordable Housing To Get A Boost With PMAY’s Scope To Be Extended To Private Lands

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Real Estate Sector May Fall Under GST What Does It Mean For Buyers?

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One after the other the real estate sector has witnessed massive policy and law changes in its systems. Nonetheless, the tide has not passed yet. The GST council will take up a proposal to bring it under the uniform nationwide levy.

As the industry is still recovering from the RERA Act, the finance minister, Arun Jaitley said that there is a strong case to include real estate in the new indirect tax regime. He said this last week and also mentioned that GST Council will discuss it in November.

At present, the home buyers are paying 12 percent GST on under-construction properties. This percentage includes two taxes which are stamp duty and registration. The rate of which varies in each state but GST will make them uniform.

Santosh Dalvi, KPMG India partner (indirect tax) said, “If the entire real estate is brought under GST, they would have to abolish the stamp duty and we don’t know how the government plans to compensate the states for their loss.”

The stamp duty with registration and GST comes to approximately 18 percent for under construction properties. He further said, “So, it’s important to look at what rate it will be taxed at. We can then look at consumer prices”.

While agreeing, Bipin Sapra, EY partner (indirect tax), added, “It’s going to be a test for the government”.

Developers also pay taxes on raw materials. However, unlike other businesses, they don’t get any tax refunds through input credit. GST taxes every stage of the business activity to better compliance and compensates for it by permitting refunds.

Anuj Puri, Anarock Property Consultants chairman, said “By including real estate under GST, builders can get a fair amount of input credit, helping bring down costs,” He added that it would make homes cheaper for buyers.

According to Sapra, it will depend on the tax rate applicable.

Niranjan Hiranandani, co-founder of Hiranandani Group said, “Real estate under GST ambit means consumers will only have to pay one final tax.” He stated that with the commencement of RERA it brings transparency and GST would reduce the burden in terms of taxes payable while buying the home. He concluded, “Not only will this create positive sentiment but it should also boost actual sales”.

Also Read: Affordable Housing Is The Changing Face Of Indian Real Estate

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Home Buyers Will Be Covered Against Builders Who Are Going Bankrupt

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In a move to protect home buyers from builders declaring their bankruptcy, the Insolvency & Bankruptcy Board of India (IBBI) has amended rules which make it necessary for any company to showcase how they have dealt with interests of all stakeholders. This is directed towards companies like Jaypee Infratech and some of the entities of Amrapali Group.

The regulator has informed about the revised rules last week. This will ensure that banks and other creditors do not get away by protecting their interests at the expense of others who are impacted by the action.  Banks are part of the creditors’ committee. They become an important decision-making body after a company is admitted for bankruptcy.

An expert bankruptcy lawyer said, “The change in the rules has plugged a gap as flat buyers are of the view that there is nothing to protect their interests.”

According to the new law that was enacted last year intends to speed up the resolution process in a period of 180 days, with a possible extension of 90 days. This will be done by appointing insolvency resolution professionals who will take charge of the company’s operations and prepare a plan. As per the law, an information memorandum will be finalized if the creditor’s committee is willing to take applications from other interested companies to take over the company.

The insolvency experts say that the law providing for the plan binds corporate debtor (the company) and its members, employees, guarantors, and creditors, other stakeholders involved in the resolution plan. However, there are no obligations mentioned in the rule to give any treatment to the stakeholders other than the financial creditors (banks) and operational creditors, which includes vendors and others who may have dues.

The National Company Law Tribunal, based on the comfort provided by the revised rules, will choose the final resolution plan based on bids that are received. The lawyer further said, “The tribunal will not clear the resolution plan without giving notice to all stakeholders and the flat buyers can raise objections at that point of time.”

Also Read: Tanvi Group Fail To Deliver Homes And Declare Bankruptcy

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