Good News for Small House Owners and Small Businesses Regarding Property Tax in J&K

Good News for Small House Owners and Small Businesses Regarding Property Tax in J&K
Jammu and Kashmir Government Exempts Small Houses From Property Tax; Low Rates for Small Businesses. 

In a recent meeting chaired by the Chief Secretary, Jammu and Kashmir government clarified that it has exempted all poor and marginalized individuals who own small houses, up to 1000 square feet, from paying property tax that will be levied from April 2023 onwards. This decision was taken to prevent misinformation that has been circulating regarding property taxes in the region.

The meeting was attended by various officials including the Additional Chief Secretary, Home; Principal Secretary, H&UDD; ADGP Jammu/Kashmir; Deputy Commissioners; SSPs; Commissioners of Jammu and Srinagar Municipal Corporations, and other concerned officers.

The government has stated that the imposition of property tax is an essential part of urban sector reforms, and not implementing this tax has been preventing local bodies from becoming self-sustaining. The levy of this tax will improve the financial health of the institutions and improve services, as well as create employment opportunities.

However, small houses with a built-up area of less than 1000 square feet will not have to pay any property tax. Additionally, all places of worship, including Temples, Masjids, Gurudwaras, Churches, Ziarats, Cremation grounds, and Burial grounds will also be exempt from paying any property tax.

The Principal Secretary, H&UDD, Rajesh Prasad, explained that the tax is proposed to be levied at just 5% of Taxable Annual Value (TAV) of the property in case of a residential property and at 6% of TAV in case of Non-Residential property. He further stated that the tax rates, even in the Corporations, are one of the lowest in the country, almost half that of Himachal Pradesh and one-fourth to one-sixth, overall, of other progressive states like Gujarat, Maharashtra, Karnataka, and Delhi.

The Commissioner of Jammu Municipal Corporation, Rahul Yadav, elucidated that the tax is progressive in nature, with low tax on smaller assets, and is linked to circle rates – lower the circle rate, lower is the tax liability of the owner. The tax also takes into account factors like age of the property, usage type, and construction type to arrive at TAV for a realistic capture of the value of the property.

The government has asked District Commissioners to create awareness in their areas by providing real examples of calculation of tax for different properties in their ULBs of the district. The Chief Secretary also requested that the officers create a helpline for the masses, which would disseminate the correct information about this matter. The government also plans to come up with a simple ‘Property Tax calculator’ for people to assess the actual amount they are liable to pay.

The economy of Jammu and Kashmir has been doing well, with the unemployment rate showing a healthier trend, according to GoI data. The per capita income of people in Jammu and Kashmir is also amongst the better States/UTs. The Chief Secretary emphasized that people should be made aware that it is not permitted to direct ULB resources for any other purposes. The property tax paid by people will be used in their own areas, and the accumulation of tax money will be collected by the ULBs, retained by them, and used for their development needs exclusively.

The Property Tax is to be levied annually and can be paid in two equal installments. Further, a 10% rebate can be availed by early payment of the Property Tax. The payment of property tax shall also facilitate common people in availing various facilities and services through their concerned local bodies with the expenditure of funds collected by levying this tax.
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