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The Brihanmumbai Municipal Corporation (BMC) has surpassed its revised target for property tax collection for the financial year 2022-23. As of Friday evening, the civic body had collected Rs 5,350 crore, which is higher than the revised target of Rs 4,800 crore. However, it falls short of the original target of Rs 6,000 crore. Last year, the BMC had collected a total of Rs 5,792 crore in property taxes.
While talking to the press, Mahesh Patil, assistant municipal commissioner of the assessment and collection department, stated that the last fortnight of the financial year saw a 15% increase in property tax collections. However, the BMC was unable to surpass last year's record due to the Supreme Court's ruling upholding the Bombay High Court's order on Fixing Capital Values. The BMC had initially framed rules for levying property taxes based on the capital value of land under construction, but the rules were quashed by the Bombay HC.
The Central Mumbai Developers Welfare Association (CMDWA) had challenged the rules framed by the BMC under the capital value system. The system considers the future value of the property with its development potential for the levy of taxes, instead of the present value of land. Additionally, flats measuring up to 500sqft of carpet area are exempt from property tax, which has led to a loss of Rs 500 crore in BMC's collection.
Property tax is the second-largest source of revenue for the BMC. In the fiscal year 2021-22, the total collection stood at Rs 5,792 crore, while in the pandemic year 2019-20, it was only Rs 3,735 crore. The BMC has been facing challenges in increasing its revenue due to various factors, including the pandemic-induced economic slowdown and legal disputes. In addition to property tax, the BMC also collects revenue from other sources, such as water charges, development charges, and octroi.
Despite the challenges, the BMC has been taking various measures to increase revenue and improve its financial position. It has launched initiatives such as the 'One Time Settlement' scheme to recover outstanding dues from defaulters and has also been exploring new revenue streams. The BMC has also been focusing on improving tax collection efficiency using technology and data analytics.
In conclusion, while the BMC has surpassed its revised target for property tax collection, it still faces challenges in increasing its revenue and improving its financial position. The pandemic and legal disputes have impacted its revenue collection from various sources, and the BMC will need to take concerted efforts to overcome these challenges and achieve its financial goals.
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