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The Municipal Corporation of Gurugram (MCG) has formed 16 teams to check for tax evasion by investigating properties that have changed their use from commercial to residential, industrial, or institutional. These teams will submit a report by April 30, which will be based on their verification of the property categories that have changed. MCG officials said that the changes in property categories were discovered after a private agency, which was hired by the MCG to conduct a property tax survey, submitted its report last year.
According to the survey, a total of 1,244 commercial properties in the city have changed their category to residential properties, 514 to industrial use, 95 to institutional use, and 403 to vacant plots. The MCG teams will verify whether the property categories were changed correctly, and they will also inspect public parking sites, including those in shopping malls that are charging parking fees from residents. Commercial properties in the city, such as shopping malls, can get a tax rebate if they provide free parking to the public.
In an interview captured by ET Realty, MCG commissioner PC Meena confirmed that 16 teams would check all commercial properties that have registered a change in their category. Additionally, four joint commissioners and three additional commissioners would randomly check 5% of these properties each to verify the cases.
Property tax is one of the primary sources of income for the civic body. For a residential property, the tax for the ground floor is Rs 1 per sq yard with a plot size of up to 300 sq yards. On the other hand, for a commercial space, the tax for the ground floor is Rs 24 per sq yard with a plot size of up to Rs 50 sq yards. Therefore, a change from commercial to any other category, including residential and institutional, implies that the property owner has to pay a lower amount of tax.
The MCG's decision to investigate tax evasion is a significant step in addressing this issue. Many property owners change their properties' categories to pay lower taxes, which ultimately leads to a loss of revenue for the civic body. By forming 16 teams to investigate these properties, the MCG is sending a message to property owners that tax evasion will not be tolerated.
In conclusion, the MCG's decision to investigate tax evasion is a positive step in preventing revenue loss to the civic body. The investigation will help the MCG identify properties that have changed their category and are not paying their fair share of taxes. By forming 16 teams to investigate these properties, the MCG is sending a message to property owners that tax evasion will not be tolerated.
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