Property tax returns made mandatory, to be filed by Jan 31

Those who default on this score will be fined by the Municipal Corporation of Delhi (MCD). However, many taxation experts feel that the scheme leaves much to be desired.

Giving details, Municipal Commissioner V.K. Duggal said that they had taken several steps to bring transparency in the system and to simplify the process of filing returns.

He disclosed that filing of returns is also essential for landlords collecting a rent of more than Rs 3,500 per month and tenants paying rent above Rs 3,500. Similarly farmhouse owners will also have to file their returns. However, no return is necessary for self-occupied residential properties in village abadi of rural areas.

Explaining the utility of filing these returns, Duggal said that based on the information provided by the property owners and tenants themselves, the property tax notices will be prepared by their department. This would save the assessee a lot of problems, he said as there were frequent instances of protest from them because of the wrong assessment made by the officials of the department.

Duggal added that the MCD is devising a policy to fix a uniform prevalent rate. Under this policy, prevalent rent in each of the zones would be fixed by a panel of assessors. The panel would consist of an official of the Delhi government, a tax or evaluation expert as well as a representative of the property tax department. The rent so fixed would be uniformly applied to all the properties in a particular zone.

He pointed out the system of assessing would encourage the participation of the tax payers through their representative in fixation of the prevalent rent. Moreover, the MCD is conducting a survey of properties in the Capital for the purpose of assessment. He said that to ensure that correct facts are furnished in the survey, both the officials and the property owners are required to jointly sign the survey form. He added that this would leave no room for misrepresentation of facts by the officials.

Incidentally, January 31 is the last date for filing of returns and defaulters will be fined Rs 500 plus a sum of Rs 20 per day of delay.

However, Subhash Lakhotia, Financial and Taxation Expert felt that there were a lot of problems with this scheme. "First of all they should have publicised the fact that filing of returns has been made mandatory on a wider scale. There are a lot of people, who still do not know enough about it or rather don’t know anything at all," he pointed out.

Lakhotia observed that another problem was that while the income tax returns had to be filed till March 31, the MCD had asked for returns to be filed till December 31. "There should be uniformityas far as these things are concerned and dates should be the same. Moreover, there is no sense in asking both the landlord and the tenant to file the returns. Only the landlord should be accountable. Why should a penalty be levied on the tenant?" he asked.

Similarly, he felt that old assessees, for whom there has been no change in the status, should be exempted from filing the returns. Advising everyone to file correct returns, he said that however, landlords should be beware as there was every likelihood of this information being forwarded to the income tax department.