WELCOME27-7-2011

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Presentation by :Sri.P.V.V.S.Murthy

Commissioner2

Overview of Structure of Property Tax in

Kurnool Municipal Corporation

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MUNICIPAL TAXATION

1. Kurnool Municipality was upgraded as Municipal Corporation in the year 1994

2. Taxation is levied in pursuance of Hyderabad Municipal Corporation Act 1955

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SEC 197. TAXATION TO BE IMPOSED UNDER HMC ACT

1. (1) For purposes of this Act, the Corporation shall impose the following Taxes namely:-

(a) Taxes on Lands and Buildings. (b) Octori. ( c) Taxes on Vehicles. (d) Taxes on Animals and boats. ( e) Taxes on Advertisements other than advertisements published

in the newspapers.

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SEC.198. NOTICE REGARDING LEVY OF TAXES

Before the Corporation passes any resolution

imposing a Tax specified in sub-section(1) of

Section 197 for the first time or at a new rate it

shall direct the Commissioner to publish a notice

in the A.P. Gazette and local newspaper of its

intention to do so.

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1.Property Tax(a) General Tax(b) Water Tax(c) Drainage Tax(d) Lighting Tax(e)Conservancy Tax

2. Taxes shall be levied at such percentages of their rateable value as may be fixed by the Corproration.

SEC 199:- PROPERTY TAXES OF WHAT TO CONSIST AND AT WHAT RATE LEVIABLE

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SEC 204:- PRIMARY RESPONSIBILITY FOR PROPERTY TAXES ON WHOM TO REST.

1. Property Tax shall be leviable primarily form the actual occupier of the premises upon which the said Taxes are assessed .

2. Otherwise the said Taxes shall be primarily leviable as follows :-

(a) if the premises are let from the lessor. (b) If the premises are sub-let from the superior lessor and (c) If the premises are unlet from the person in whom the right to let the same, vest.

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VALUATION OF PROPERTY ASESSABLE TO PROPERTY TAXES

Sec.212:-Rateble Value how to be determined:-

[(1)] (a) The annual rental value of lands and buildings shall be deemed to be the gross annual rent at which they may be reasonable expected to be let month to month or year to year with reference to its location, type of constructions plan of plinth area age of building, nature of use.

(b) The annual rental value of lands and buildings shall be deemed to be the gross annual rent at which they may be reasonable expected to be let month to month or year to year, less a deduction at the rate of 10% of buildings aged upto 25 years and 20% of the buildings aged above 25 years.

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[2] Any vacant land not exceeding three times of

plinth area of the building including site or a vacant

land to the extent of one thousand square meters

which ever is less shall be deemed to the adjacent

premises occupied as an appurtenant to the building

and assessed to tax, to such building the tax shall be

levied thereon at 0.50% of the estimated capital

value of the land.

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SEC.213:-COMMISSIONER MAY CALL FOR INFORMATION OR RETURNS FROM OWNER OR OCCUPIER OR ENTER INSPECT ASSESSABLE PREMISES

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SEC. 214:-ASSESSMENT BOOK WHAT TO CONTAIN

1. A List of all Buildings and Lands in the city either by name or number.

2. The rateable value of each such building and land.

3. The name if ascertained of the person for payment of property tax.

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4. If any such building or land is not laible to be assessed to the General Tax the reasons of such non liability.

5. When the rates of the Property Taxes to be levied for the year have been duly fixed by the Corporation.

6. Under Section 227 or 228 a charge is made of Water supplied to any building or land by measurement of the Water Tax or Water Charge fixed at a special rate.

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Sec.215:- The Assessment book to be made separately for each ward and in parts if necessary

Sec.218:- Public Notice to be

given when Valuation of

Property in any Ward has been

completed.

Sec.219:- Assessment Book to be inspection

Every Person who reasonable claims to be the owner of some premises entered in assessment book, he shall be permitted to inspect and take extract of the said book.

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SEC. 220, 221:- TIME OF FILING COMPLAINTS AGAINST VALUATIONS

TO BE PUBLICLY ANNOUNCED.

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Sec.226 :- New Assessment Book need not be

prepared every financial year.

A New Assessment Book shall be

prepared at least once in every five years.

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Sec.229 :- Supply of Water at public drinking fountain etc., not to be taxed.

Sec.232 :- Refund of Property Tax :- any building or land or any portion of premises which the Commissioner has treated under Sec 216 as separate property vacant not less than ninety days

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COLLECTION OF PROPERTY TAXES

Sec.264 :- Property Tax how payable:-

1. Each of the property taxes shall be payble in half yearly.

2. Half yearly installments, the taxes shall be payable in advance on each first day of April and October.

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2005-06 (97.49%)

2006-07 (94.15)

2007-08 (98.20)

2008-09 (91.20)

2009-10 (79.58)

2010-11 (97.99)

Property tax Collection from 2005-06 to 2010-11

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2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Taxes and Non TaxesTaxes and Non – Taxes Collection from 2005-06 to 2010-11

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Sec.266:- Service of Bills

Every such bill shall specify the period for which the premises the Tax is Charged herein after provided against time within which objection may be raised or on the decision.

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SEC.268 :- NOTICE OF DEMANDif the amount of Tax for which any bill has been served as aforesaid is not paid into the Municipal Office within 15 days from the service thereof, the Commissioner may cause to be served upon the person liable for the payment of the same a notice of demand in the form of Schedule K or to the like effect.

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Sec.269:- Distress:-if the person liable for the payment of Property Tax does not within 15 days from the service of the notice of demant, pay the sum due or show sufficient cause for the non payment of the same to the satisfaction of the Commissioner, such sum with all cost of the recovery may be levied under a warrant in the form of schedule L or to the like effect to be issued by the Commissioner by distress and sale of the goods and chattels of the defaulters.

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AREA BASED MODELS OF ASSESSMENTS.No Feature K.M.C1 Basis of Levy Annual Rental Value2 Components •Tax for General Purpose

•Water and Drainage Tax•Lighting Tax•Scavanging Tax

3 Basis of Assessment Plinth Area – Zonal ARV rates are fixed by the ULBs for various categories of buildings and uses

4 Location Factor/Zoning Zoning is done with reference to expected rental values in different localities based on availability of civic services proximity to markets, educational institutions, etc.

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5 Construction Factor/ Type of construction

-RCC- Madras Terraced-Mangalore-Asbestos roofed/GI roofed-Huts

6 Use Factor Residential, Shops, Shopping complexes, Public uses offices, Banks, Hospitals, Nursing homes and Educational institutions, Commercial Hostel/Lodges/Restaurants and Godowns, Industrial, Cinema Theatres, Places of entertainment.

Rebates/DeductionsOccupation Factor Owner occupied – residential buildings -

40% inclusive of rebate under age of building . Tenant occupied – residential buildings – 10% inclusive of rebate under age of buildingOwner / Tenant occupied – Non-Residential buildings – 10% inclusive of rebate under age of building.

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Rebates/Deductions

Occupation Factor Owner occupied – residential buildings -40% inclusive of rebate under age of building . Tenant occupied – residential buildings – 10% inclusive of rebate under age of buildingOwner / Tenant occupied – Non-Residential buildings – 10% inclusive of rebate under age of building.

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Module for calculation of Property Tax of a Residential Building.

Plinth area of the Building :- 10.mts X10.mts =100 sq.mts.

Roof of Building :- R.C.C.

Nature of usage :- Residential Owner

Rate fixed for one sq.mt.:- Rs.11.50

Monthly Rental Value of the Bldg :- 100 sq.mts X 11.50 =1150.00 M.R.V.

M.R.V.= (2/3 Building Value) X ( 1/3 Site Value).

Annual Building Value :- (1150X 2/ 3)X12 = 9199.99 or 9200

Annual Site Value :- (1150 X 1/3) X12 = 4599 or 4600

Annual Building Value :- 9200 X 40% =3680 (Less depreciation for owner occupation)

9200-3680 = 5520 (net ARV after depreciation)

Annual Rental Value :- ABV + ASV =ARV (5520 + 4600 = 10120 )

Property Tax fixed :- ARV X 12.50% = (10120 x 12.50% =Rs. 1265/- per half year.

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MODULE FOR CALCULATION OF PROPERTY TAX OF A RESIDENTIAL BUILDING.

Plinth area of the Building :- 10.mts X10.mts =100 sq.mts.Roof of Building :- R.C.C.Nature of usage :- Residential Tenant.Rate fixed for one sq.mt.:- Rs.11.50Monthly Rental Value of the Bldg :- 100 sq.mts X 11.50

=1150.00 M.R.V.M.R.V.= (2/3 Building Value) X ( 1/3 Site Value).Annual Building Value :- (1150X 2/ 3)X12 = 9199.99 or 9200Annual Site Value :- (1150 X 1/3) X12 = 4599.99 or 4600Annual Building Value :- 9200 X 10% =920 (Less depreciation

for owner occupation)9200-920 = 8280 (net ARV after depreciation)Annual Rental Value :- ABV + ASV =ARV (8280 +4600 =12880 )Property Tax fixed :- ARV X 12.50% = (12880 x 12.50% =Rs.

1610/- per half year.29

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MODULE FOR CALCULATION OF PROPERTY TAX OF A NON- RESIDENTIAL BUILDING.

Plinth area of the Building :- 10.mts X10.mts =100 sq.mts.Roof of Building :- R.C.C.Nature of usage :- Non-Residential (Shop) (Owner / Tenant).Rate fixed for one sq.mt.:- Rs.68.00Monthly Rental Value of the Bldg :- 100 sq.mts X 68.00 =6800

M.R.V.M.R.V.= (2/3 Building Value) X ( 1/3 Site Value).Annual Building Value :- (6800X 2/ 3)X12 =54396 Annual Site Value :- (6800 X 1/3) X12 = 27199.99 or 27200Annual Building Value :- 54396 X 10% = 5439 (Less depreciation

for owner occupation)54396-5439 = 48957 (net ARV after depreciation)Annual Rental Value :- ABV + ASV =ARV (48957+ 27200 =51657 )Property Tax fixed :- ARV X 16.50% = (51657 x 16.50% =Rs.8523/-

per half year.

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Finances of Municipalities

Main sources of Income :Taxes :i. Property Taxii. Advertisement Taxiii. Government have taken over levy and

collection of Profession Tax from 1987-88 and paying compensation to the ULBs

PROPERTY TAX AND WATER CHARGES ONLINE COLLECTION COUNTERS IN THE OFFICE PREMISES

Tax Payers paying Tax at Office Collection Counter

STAFF COLLECTING TAX FROM THE TAX PAYERS

COMPUTERIZED DEMAND NOTICES OF PROPERTY TAX AND WATER CHARGES ARE ISSUED FOR TAX PAYERS.

TAX PAYERS ARE FACILITATED FOR PAYMENT OF PROPERTY TAX AND WATER CHARGES ONLY THROUGH ONLINE COUNTERS LIKE COLLECTION COUNTER IN OFFICE PREMISES AND THROUGH E-SEVA CENTERS.

DUE TO ONLINE COLLECTION MIS-APPROPRIATION AND MALPRACTICES ARE AVOIDED.

THERE IS ALSO GOOD RESPONSE FROM THE PUBLIC FOR PAYING OF TAXES

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Non-Taxes

i. Water Chargesii. Fee from Markets and Slaughter

Housesiii. Rents from Commercial Complexes iv. Building Licence Feev. Trade Licence Feevi. Betterment and development charges vii. Encroachment Feeviii. Contributions towards water supply

connections

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Water Charges 1. Kurnool Municipal Corporation is having 33635 domestic Tap connections and collecting @ Rs.600/-for each half year for each assessment.

2. Kurnool Municipal Corporation is having 707 Nos. of metered Tap connections given for the Commercial buildings. And the charges are claimed as per unit rates.

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Fees from Markets and Slaughter Houses

Kurnool Municipal Corporation will conduct open auction for each financial year. The details are given below. It is got income of Rs.8.58 lakhs for the financial year 2011-12 which is collected in advance at the time of finalization of open auction.1.Markets :- 3 Nos.2.Slaughter Houses :- 4 Nos.3.Cycle Stands and other properties:- 4 Nos.

Rents from Commercial Complexes

Kurnool Municipal Corporation is having 21 complexes with 401 shops. The shops are leased out in open auction. Reservation is given to S.C., S.T. & Disable.Kurnool Municipal Corporation is getting income Rs.132.84 lakhs per annum.

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Assigned Revenues

i. Entertainment Tax : 90% of Entertainment Tax collected by Commercial Tax Department is assigned to ULBs on quarterly basis.

ii. Surcharge on stamp duty : Surcharge on Stamp Duty is levied @ 2% of the value of the instrument by Registration Department and 100% of the Surcharge on Stamp Duty is allocated to ULBs on quarterly basis

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THANK YOU

overview of municipal authorities in ap dt[1]. 19-7-2011