Voice Against New Capital Value System of MCGM Mumbai
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Following are some of the concerns that we have raised with MCGM against the New Capital Value Assessment system
1. Ready reckoner does not reflect the actual market values of the residential properties. There is huge disparity in the ready reckoner based valuation & actual Market values of the properties in well known localities from Southern Mumbai regions. (This can be physically verified by comparing ready reckoner value for properties in posh localities like Worli)
If Ready Reckoner is used as reference for determining the Base Value for tax calculation, we fear that middle class localities from Suburban regions may end up in paying more tax to compensate for the less that actual tax collection from Upper class residents from Mumbai City (Southern Mumbai) region.
2. Carpet area should be used instead of built up area for the purpose of arriving at capital value
Points mentioned in Rule No. 10 Section (a) points (i) to (xix) in the draft rules of Capital Value Assessment are not included in FSI calculation as per DCR & MRTP Act 1966. Ref: Judgement given by Honourable Bombay High Court Appellate Judicature First Appeal No. 2182 of 2007. This judgement very clearly states that Area which is not a part of FSI, is not assessable for corporation taxes.
We have requested MCGM to honour the High Court judgment & do not insist of charging the taxes on built up area
3. Car Paking, except those in the form of Covered Garages (Surrounded by walls completely from 3 sides) AND considered in FSI calculation should not be included in determining the Capital Value & thus, the property tax applicable on the property.
Ref: Judgement given by Honourable Bombay High Court Appellate Judicature First Appeal No. 2182 of 2007. As per this judgment, If area of parking is not included in the FSI, it is not assessable for the Corporation Taxes.
4. Mezzanine Floor, Loft & Attic Floor are not under exclusive possession of anyone. It shouldn’t be included in Capital Value calculation, unless it is considered in FSI calculation.
Areas which are not considered in FSI calculation as per DC Rules & MRTP Act 1966 should not be included while calculating Capital Value AND Property Tax based on Capital Value.
5. Multilevel Car Parking having three or more level (Definition of Amenities) - This definition should be changed to Multilevel car parking having more than 1 Level. There is no apparent need to call only more than 3 Level car parking as ‘Multi Level Car Parking’.
The ‘Multi Level Car Parking’ amenity definition should include car parking having more than 1 level, as the dictionary meaning of word ‘Multi Level’ suggests.
6. Weightages by multiplication to be assigned to a building on account of age of the building. This weightage should also consider the ‘Quality of Construction’.
Net weightage should be a resultant of ‘Age of Building’ & ‘Quality of Construction’. If building has inferior quality of construction, expected life of construction will be lower. Buildings facing problems like Water Leakages, Cracks in Concrete should be given special consideration while determining the Capital Value.
7. Formula of Calculation of Property Tax (as per circular published on MCGM Website)
Tax = r * Area * (M.V. * U * C * A)
Where
M.V. = Market Value
A = Age Factor
C = Construction Factor
U = User Factor
r = Tax Rate
Tax Rate (r) should be uniform for all zones & sub zones across entire Mumbai City & Suburban zones. Maintaining uniform Tax Rate (r) across all zones will help in maintaining uniformity & discipline & avoiding malpractices while determining tax liabilities.
Last of Submitting the objection is 15th Nov 2010 at BMC Head Quaters
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