J&K govt to impose property tax from April this year: Read all details here

As per the notification, issued by Housing and Urban Development Department, the Taxable Annual Value (TAV) of a property under the Act and the property tax due thereon for a financial year shall be calculated in accordance with the formula given in Schedule-l to these rules.

Srinagar (J&K):The Jammu and Kashmir administration on Tuesday notified the rules for levy, assessment, and collection of property tax from the residents of Jammu Kashmir beginning this April. The property tax, 5 percent for residential property and 6 percent for the non-residential property will be imposed from April 1, 2023.

As per the notification, issued by Housing and Urban Development Department, the Taxable Annual Value (TAV) of a property under the Act and the property tax due thereon for a financial year shall be calculated in accordance with the formula given in Schedule-l to these rules. Pertinently, property tax will be imposed on both residential and non-residential properties. Also, the Ministry of Home Affairs (MHA) has authorised the Jammu and Kashmir administration to impose property taxes through Municipal Corporations, Municipal Councils, and Municipal Committees in October 2020.

This comes after, the Jammu and Kashmir Municipal Act of 2000 and the Jammu and Kashmir Municipal Corporation Act of 2000 were modified by the MHA with the enactment of the Jammu and Kashmir Reorganization (Adaptation of State Legislation) Order of 2020. The property tax will be calculated in respect of a building calculated in accordance with a block of three years unless any change to such calculation is necessitated on account of the circumstances envisaged in the Act for allowing revision in such calculation, the notification reads.

It further says the first block shall commence from 1 April 2023, and shall continue to remain in force till 31st March 2026. The blocks shall be similarly calculated thereafter. Regarding new buildings, the notification says: "New buildings coming up after the commencement of the block shall have their property tax liability calculated with reference to the 1st day of the relevant block, and irrespective of their having completed three years, their liability to tax shall be calculated anew from the date of commencement of the new block of three years for the Corporation as a whole."

"Where a building is liable to property tax for only a part of the year, the tax due shall be proportional to the number of completed months and parts of the month not completed shall be ignored," it adds.

National Conference demands immediate rollback

The National Conference demanded immediate rollback of the notification. NC spokesperson Imran Nabi Dar in a statement said the people of Jammu and Kashmir "have been at the receiving end economically since 2019" due to the losses suffered because of the restrictions imposed from August 5 that year and subsequent COVID-19-induced lockdowns.

"Imposition of the property tax will further push the people to the wall. Such decisions will make the situation even worse.... Such matters should be left to an elected government," he said. "Unfortunately such important issues don't face public scrutiny in the current bureaucratic setup. It has become a habit of those in power in Delhi to issue orders, irrespective of their impact or public opinion," he said and termed this decision anti-people and a grave injustice.

How tax will be collected

The procedure prescribed in Chapter VI of the Act, except insofar as it relates to the calculation of the tax due on a property, shall regulate the assessment and collection of property tax. A person liable to property tax shall furnish to the Executive Officer or any officer authorized by him in this behalf the particulars of the property and the tax due thereon in Form-1 by 30th May of the financial year to which the return pertains.

It shall be accompanied by proof of payment in Form-2. Acknowledgment of filing of return shall be in Form-3. A copy of the acknowledgment along with the proof of payment of the second installment of tax shall be furnished by 30th November in cases where the payment is made in two installments.

Penalty?

Failure to file the return in due time, unless prevented by sufficient cause, shall, without prejudice to the interest due for delay in payment, make the person from whom it is due liable to a penalty of Rs 100 or 1% of the tax due, whichever is higher, for every month of default. The maximum penalty shall not exceed Rs 1000.

The notice in terms of sub-section 8 of Section 73 of the Act shall be in Form-4 and the date of inspection shall unless there are reasons to recorded in writing for giving a shorter notice, not be less than 14 days from the date of notice.

Assessment

The notice in terms of sub-section 9 of Section 73 of the Act shall be in Form-5 clearly mentioning the liability of property tax proposed to be determined and the basis thereof, and the date of hearing shall, unless there are reasons to recorded in writing for giving a shorter notice, not be less than 21 days from the date of notice.

The notice in terms of sub-section 10 of Section 73 of the Act shall be in Form-5A clearly mentioning the additional amount of property tax proposed to be levied and the basis thereof, and the date of hearing shall, unless there are reasons to recorded in writing for giving a shorter notice, not be less than 21 days from the date of notice.

The notice of demand in pursuance of assessment or reassessment under sub-section 11 or sub-section 13 of Section 73 of the Act, as the case may be, shall be in Form-6. Till such time the Jammu and Kashmir Property Tax Board in terms of the Jammu and Kashmir Property Tax Board Act, 2013 is constituted, the reference thereto in Section 90, 91and 92of the Act shall be deemed as a reference to the Director Urban Local Body of the concerned division.

Exemption

Vacant lands, not appurtenant to a building shall be exempt from property tax if there’s a Master Plan in force in the area, under which any construction on such vacant land is disallowed or if they have been put to agricultural use as per 6- monthly cropping surveys of the Revenue department.

Similarly, all the properties of the Municipality and all places of worship, including temples, masjids, gurudwaras, churches, ziarats and cremation and burial grounds shall be exempt from payment of property tax. All properties owned by the Government of India or UT Government shall be exempted from payment of Property Tax. However, service charges at the rate 3 percent of the taxable annual value shall be payable to the Municipality in respect of such properties, the J&K admin said in its notification.