By CM Sharma
The Jammu and Kashmir administration on 25 February ordered the imposition of Property Tax in municipal areas from April 1, drawing strong protests from people from almost all walks of life. Political parties, business organizations, Jammu Bar Association and others are demanding an immediate rollback of the order.
Rates and parameters of Property Tax
According to the rules notified by the Union Territory administration on 21 February for the levy of property tax on people living within the territorial jurisdiction of urban local bodies across Jammu and Kashmir with effect from April 1 this year, the property tax will be 5 per cent of Taxable Annual Value (TAV) in residential property and 6 per cent in the case of non-residential property. The TAV of a property will be decided keeping in mind factors like the type of the municipality, one-tenth of the land value rate as notified by the government, floor, area, usage, age of property, slab, and occupancy, among others.
Legalities
This has been done in the exercise of the powers conferred by Section 71A of the Jammu and Kashmir Municipal Act, 2000, read with Sub-Section 1 of Section 65 and Sub-Section 1 of Section 73, said the notification issued by principal secretary (Housing and Urban Development department) H Rajesh Prasad.
Following the August 2019 abrogation of Article 370, which guaranteed special status to the erstwhile Jammu and Kashmir state, the Ministry of Home Affairs had in October 2020 allowed the UT administration to impose property tax through urban local bodies.
Justification
On 28 February, the Lieutenant Governor Manoj Sinha, while defending the imposition of Property Tax said, “It will be implemented in consultation with the general public. Common citizens' interests will be protected.” At the same time, he added, “Citizens' welfare is the foremost priority of the government and property tax will ensure financial self-sustainability of cities and improvement of public amenities in the union territory”.
“Our cities must witness rapid development and emerge as Engines of Growth. For that, financial self-sustainability of cities is necessary. Property tax in J&K will be one of the lowest in the country and will be used for improving public amenities in J&K.” He added.
Sinha regretted, and criticised those opposing the introduction of property tax, saying, “We want every facility but are not ready to pay for anything. People need to rethink this.”
He said that “unnecessary hue and cry” is being raised over the imposition of property tax despite it being the lowest in the country. LG said, “The people are supreme and it is the duty of the administration to watch their interests but those who are capable of paying for the services are also not interested in paying. They have money to buy i-Phones, internet data packs and for playing video games but are not ready to pay the taxes.”
Opposition to Property Tax
Terming the decision of the government as “anti people”, the National Conference, the Congress, and the Democratic Azad Progressive Party have announced that they will reverse all “anti-people” decisions taken by the present dispensation if they were voted to power. The Jammu Chamber of Commerce and Industry led by its president Arun Gupta and Jammu Bar Association have warned the administration of giving a Jammu Bandh call if it did not withdraw its decision to levy property tax on the people.
Former Jammu and Kashmir Chief Minister Omar Abdullah has opposed property tax imposed by the Government in Jammu and Kashmir. He has said, “No Taxation without Representation”. “Why should people in J&K pay state taxes include the proposed property tax when we have no say in how our government is run & no say in the decision making of J&K.? We are expected to be mute spectators to all unjust decisions by Raj Bhavan,” says Omar.
J&K Apni Party president Syed Muhammad Altaf Bukhari was quoted as saying, “Time is not conducive for the imposition of Property Tax in Jammu and Kashmir.” He has also urged the J&K Lieutenant Governor Manoj Sinha to delay imposition of property tax by a few years. He says that the people in Jammu and Kashmir are not in a position to pay property tax. “Lieutenant Governor may be correct in saying that the people in other states are also paying the tax, but the people of Jammu and Kashmir are not in a position to pay the property tax by now… …I am not trying to browbeat you…if any political party can, they can…we are just requesting you on behalf of the people of Jammu and Kashmir, let us delay it for a few years.” Bukhari has told reporters in Srinagar.
Lt. Governor reminds of Government's
Initiatives and rights & duties of Citizens
The Lt Governor Manoj Sinha has been repeatedly urging citizens not to fall prey to the misinformation spread on Property Tax. In an address to the reporters after inaugurating a GST symposium and tax awareness initiative ‘Kar-Tavya' at the convention centre Jammu on March 1, Sinha said, “Nearly 75 to 80 percent of the population of JK will be exempted from the Property Tax. Those who are falling under the purview of Property Tax are trying to create chaos and confusion among the common masses”.
Sinha said, “The citizens across the country are paying Property Tax. Property Tax proposed for Jammu and Kashmir is one-tenth of Shimla-the capital of neighbouring Himachal Pradesh”. He pointed out that on an average Rs 900 to Rs 1000 shall have to be paid annually as Property Tax.
“Every year government grants funds worth Rs 900 crores to the urban local bodies of JK. Property Tax will be directly deposited to the concerned urban local bodies for the overall growth and development of the area,” he added.
Lieutenant Governor, Manoj Sinha was emphatic to say on 5 March, after inaugurating new facilities at the Jammu Club, that every person in Jammu and Kashmir has to play an equally important role to effectively counter the misinformation on property tax and convey the truth and facts to the general public. “Administration and citizens have a shared responsibility to build an inclusive & developed J&K. It is time for everyone to introspect because rights & duties are two sides of the same coin. We must pay for services wherever necessary so that UT moves faster on the development trajectory,” Sinha said.
“We are working with dedication, commitment and with a people-first approach to transform the life of the common man. Each one of us will have to play an equally important role to effectively counter the misinformation on property tax and convey the truth and facts to the general public,” Sinha said.
He said the society does not progress only because of infrastructure and material comforts, but by discharging responsibilities.
The LG said that some people are deliberately trying to spread misinformation and create a false narrative.
“We are ready to consider better suggestions and solutions. We will implement genuine suggestions. In every decision that we have taken so far, the interest of the common man and business community has been paramount,” he said.
“Common man has no issue with property tax. Only some special people are troubled by it, who had gathered fortunes for many generations by hoodwinking the common masses of J&K,” he added.
Exemptions
The LG has repeatedly asserted that Jammu Kashmir is the last among the states/UTs to introduce the provision of property tax which is the least as compared to other regions.
“Out of 5,20,000 houses in urban areas, 2,06,000 i.e. 40% houses which are less than 1000 sq ft are completely exempted. Minimum tax has been imposed on other houses. We have made such arrangements that out of 5,20,000 houses, 4,09,600 houses (80%) are either be totally exempted or will have to pay less than Rs.1000 as property tax annually. Similarly, out of 1,01,000 shops in urban areas, around 76,000 i.e. 75% shops are such that they will be paying less than Rs 2000 property tax annually and 45% i.e 46,000 shops out of 1,01,000 shops will have to pay less than Rs 700 tax annually,” he has said. “This is a very nominal amount as compared to other cities of the country like Shimla, Ambala, Dehradun,” he has added.
LGs warnings and assurances
The Lieutenant Governor has appealed to the people to support the government's initiative to develop the towns and cities of Jammu and Kashmir and has urged the people not to fall prey to certain vested interests spreading false information and creating misconceptions around anti-encroachment drives, power generation, and property tax.
“No poor will be touched during anti-encroachment drives but no influential encroacher will be spared. The encroached land retrieved by the government will be utilized for the welfare of the common man and schools, colleges, hospitals, and sports facilities will be developed on the retrieved land,” says the Lt Governor. Religious places have been exempted from the purview of Property Tax.
An Overview on Property Tax
Property tax bills can rise without property owners doing anything, and rising tax bills can push property owners (homeowners in particular) to make economic decisions they might prefer to avoid.
Justin Fox (2017), a The Bloomberg Opinion columnist covering business and a former editorial director of Harvard Business Review says, “People can adjust their spending, and often their income. But they can't help it if, say, house prices go up 80 percent in just three years – as they did in California from 1975 to 1978. Taxing property is in general more problematic politically because homeowners have gone from a minority to a majority with an especially high propensity to vote.”
In many developed countries, property taxes are used mainly to fund local governments and schools. It is levied in India by the Local municipal authorities for the maintenance of essential civic services and amenities in the city like roads, parks, sewer system, and other infrastructure facilities like lighting, etc. Homeowners thus see a direct link between what their property taxes pay for and the value of their homes.
Because of the fast rising home-prices, property taxes have been the least popular tax world over, no matter how justified these may be economically and ethically.
In J&K, LG appears to be handling the issue single handily albeit with support from the large sized advertisements put up by the UT Information Department in a couple of their choicest newspapers and through street hoardings. Leaders of political parties that are supporting the government, appear to be neither seeing, nor listening nor speaking out their hearts and minds.
