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Property tax serves as a critical source of revenue for municipal corporations in India, enabling them to finance essential services and infrastructure projects. This article is an overview of property tax collection trends across several major Indian cities for the financial year 2023-24 (ending March 31st, 2024).
Rajkot did a great job collecting property taxes. They brought in a record-breaking INR 365.49 crore, almost 90% more than the past five years. One reason for their success? Technology. Rajkot sent tax bills and offered ways to pay online directly through WhatsApp. This made it very easy for people to pay their taxes, and nearly everyone (98%) did.
Lucknow also had good news. They collected more than ever before - over INR 650 crore in total revenue. A big part of this increase came from property and house taxes, which went up by 26% to INR 425 crore. They collected more from businesses (commercial properties) at 73.5% than from homes (residential properties) at 62%.
Nashik's story is a little different. They collected INR 206 crore in property taxes, the most they ever had. But this was still less than their goal of INR 210 crore. However, they did a good job of finding people who hadn't paid their taxes. They sent notices to over 200,000 people and collected an extra INR 35 crore in just two months.
Visakhapatnam collected the most property tax out of all the cities we looked at. But they only collected about INR 457 crore, which is only 32% of their goal. However, they did collect more than last year (INR 420 crore). This might be because the state government helped out by forgiving penalties on property taxes if people paid by a certain date. This likely encouraged many people to pay their taxes.
Pimpri Chinchwad has been collecting more and more property tax each year. This year, they collected a record INR 977 crore, which is a big jump from INR 810 crore last year. This steady increase shows they have a good system in place for collecting property taxes.
Kolhapur had some trouble reaching their goals. They only collected INR 464 crore out of a target of INR 568 crore. Interestingly, their department that handles building permits and other services collected the most money (INR 91.8 crore). This suggests they might need to find new ways to collect more property taxes.
Jamshedpur Municipal Corporation (JMC-G) achieved a new record, collecting over INR 147 crore in urban development tax, house tax, and advertisement tax. Their significant increase in advertisement tax revenue (80% compared to the previous year) suggests potential in exploring additional revenue streams beyond traditional property taxes.
While some cities celebrate success stories, others face challenges. The Municipal Corporation of Delhi (MCD) witnessed an 11.5% decrease in property tax collection compared to the previous year, falling short of their target. This highlights the importance of exploring various strategies to encourage tax payments.
Looking beyond individual cities, the state of Uttar Pradesh offers a broader perspective. All 17 municipal corporations within the state registered a 33% growth in revenue collection, cornering INR 3,102 crore in the 2023-24 financial year. Lucknow and Kanpur were at the forefront of this achievement, significantly increasing their collections through technology-based solutions.
These examples show how important property tax is for cities to raise money. Some cities are doing well with new ideas and stricter rules, while others are struggling. It will be interesting to see how cities improve their property tax collection in the future, which will allow them to provide better services for their residents.
Property tax collection varies significantly across India, with smaller towns facing different challenges than major cities. Two key factors also impact the amount each city collects: property values and tax awareness. Cities with higher overall property values can collect more in taxes since tax amounts are based on property worth. Additionally, municipalities that educate residents about property taxes may see improved collection rates if citizens better understand their tax obligations. With insight into these location-specific issues as well as differences in property values and knowledge, the disparities in property tax collection across India and its many regions become more comprehensible.
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