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TOPIC: Mumbai Property tax news

Mumbai Property tax news 1 year 4 months ago #8385

Crackdown On Mumbai Tax Defaulter: Pay property tax on time or lose your fridge, computer, AC, warns BMC

India’s richest civic body, the Brihanmumbai Municipal Corporation (BMC), has put the city’s property tax defaulters on notice, saying they will now seize moveable property such as computers, furniture, sofas, televisions, refrigerators, air-conditioners and other valuables if they don’t pay up by the due date.
According to the new policy unveiled by the BMC on Tuesday, due time will be given to the people to pay their outstandingproperty tax. The assessment and collection department of the BMC issues property tax bills for the financial year every May. The deadline for paying 50 per cent of the tax is August, with the remaining 50 per cent to be paid in December.
While the existing practice has been to levy penalty charges on defaulters, sources in the BMC said the Bombay High Court, hearing a property tax-related petition, had told the civic body not to collect such penalty charges for now. The civic body has, hence, devised alternate means to penalise the defaulter.
According to the new policy, the corporation will disconnect the water connections of defaulters in three weeks to recover property tax dues. If the defaulters still don’t pay, the BMC proposes to seize moveable properties such as computers, furniture, other valuables, except stree dhan (gold gifted to a woman at her wedding). It proposes to seal the lifts, building material and entrance of the building to restrict its usage to recover the property tax due on land, according to the policy.
Municipal Commissioner Ajoy Mehta issued a circular regarding this policy Tuesday. The policy also allows the civic body to instruct banks to freeze the accounts of tax defaulters. Besides, if the defaulters still don’t settle their dues, the civic body will auction the property. “The property will be given to the successful bidder. If the bid amount is less than the reserve price, the civic body will buy the property at a nominal rate. If the BMC buys the property, a title will be given to it and its name will be added on the property card,” states the policy.
Officials from the assessment and collection department said the policy is aimed at boosting property tax collections. In March, the BMC had cracked the whip on a top property tax defaulter who owed over Rs 1 crore. There were close to 120 such defaulters, with the total outstanding being around Rs 524 crore.
Sanjay Mukherjee, Additional Municipal Commissioner said there was no such policy earlier

Source: Indianexpress
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Mumbai Property tax news 1 year 4 months ago #8448

Property co-ownership doesn’t mean joint I-T liability, rules Mumbai Income-Tax Appellate Tribunal

If the spouse has not invested in a property and is merely a co-holder, then on sale of such property, she cannot be liable for tax on capital gains, the Mumbai Income-Tax Appellate Tribunal (ITAT) has recently ruled.
The ITAT order will help many taxpayers as married couples are increasingly opting for property registration in joint names, even if only one of them is the investor.
Anil Harish, an advocate specializing in real estate, said: "Co-holding of property is popular. Often the name of a spouse (say wife) is added to provide a sense of comfort, to ensure ease of succession on death of the partner or other reasons such as facilitating voting in a general body meeting of the housing society."
The ITAT gave the order on Wednesday while hearing a case of a medical professional, Vandana Bhulchandani.
An income-tax (I-T) officer, based on information in his possession, noted that Bhulchandani had not disclosed the capital gains arising from the Rs 2.12-crore sale of a property in Parel that she jointly held with her husband in her I-T return for the financial year 2008-09.
She informed the I-T officer that her husband had made the entire investment and the property was reflected in his books of accounts—from the date of purchase till the date of sale. The officer also observed that Bhulchandani's husband did not incur any I-T liability on the capital gains arising from the sale—the husband had set off the short-term capital gains arising from the Parel property sale against the short-term capital losses incurred by him on the sale of shares. Under the I-T Act, short-term capital losses can be set off against capital gains arising in the same financial year and only the surplus, if any, is taxable.

But the I-T officer claimed that the entire arrangement was done to avoid tax payment and held Bhulchandani to be liable for 50% of the total short-term capital gains arising from the property sale and added Rs 45.38 lakh to her taxable income. Short-term capital gains are taxed at the applicable I-T slab rates, which depending on an individual's income varies between 10% and 30% in addition to applicable surcharge and cess.
Bhulchandani approached the commissioner of income-tax (appeals) who directed deletion of the addition. The I-T officer then filed an appeal before the ITAT. But the tribunal took into cognizance that the husband had bought the property, which was duly reflected in his books of accounts, and had also disclosed the details of the sale in his I-T return and thus, dismissed the appeal.
"The ITAT order is clear and correct. It will provide clarity in cases of co-holding of property, where the spouse has not made any monetary investment," said Harish.

Source: TimesofIndia
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