Bypoll effect: Property tax penalty, interest waiver announced

Time of India

15-05-2025

Ludhiana: Ahead of the
Ludhiana West bypoll
, the local bodies department has provided relief to property tax/house taxpayers who have not paid tax for previous years. According to a notification issued on Thursday, penalty and interest amount has been waived from the principal amount.
The notification was expected around the MC election but it was finally notified ahead of the west bypoll.
As per the notification, the
one-time settlement scheme
will provide relief to people with unpaid or partially paid property tax or house tax due till March 31. If the principal amount is paid in lumpsum by July 31, penalty and interest levied on the amount will be waived during this period.
If the dues are paid after July 31 but before Oct 31, then taxpayers will get 50% waiver on penalty and interest levied on the said amount, along with the principal amount.
After this period, penalty and interest on the due amount will be charged as levied.
Civic officials fear that this would lead to losses, especially when it comes to defaulters who have not paid their dues since 2013-14. An MC official said on condition of anonymity, "This happens every time there are elections. Our situation becomes so embarrassing because sometimes, we collect the whole amount, including interest and penalty, and the very next day, the government issues such notifications.
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People start asking why we were in such a hurry when this notification was about to be issued," he said.
The official added that the civic body had to recover at least Rs 70 crore principal amount from defaulters for various years, and the amount doubled with the inclusion of interest and penalty. "In a way, it is almost one year's total recovery targets," he said.
This also comes as a blow to regular taxpayers. A resident of SBS Nagar, Arvind Sharma, said, "I am in the habit of paying all my dues on April 1 every fiscal year, but this year, due to my eye surgery, I am yet to pay property tax for this fiscal year, which I will pay in the next two days.
However, I feel that the government is encouraging wrong behaviour. People do not want to pay tax on time because they know they will get relief near elections.
" He also said that the government should encourage taxpayers who pay tax on time.
Civil Lines resident Manjit Singh said that the practice of offering freebies in exchange for votes was not good from the point of view of development. He said that if people did not pay taxes, then the govt would not be able to do anything for development of the city, state, or even country.
Know the OTS scheme
Full Waiver: If the principal amount is paid in lumpsum by July 31, penalty and interest will be waived.
Partial Waiver: If paid after July 31 but before October 31, taxpayers will receive a 50% waiver on penalty and interest.
No Waiver: After October 31, penalty and interest will be charged as usual.
Concern for civic body: A civic official voiced concern about potential losses, especially from defaulters who haven't paid dues since 2013-14.
The MC needs to recover at least Rs 70 crore in principal amount.
Effect on regular taxpayers: Regular taxpayers feel discouraged, as they believe the government is encouraging late payments by offering relief near elections
Development concerns: Some residents argue that offering such waivers in exchange for votes is detrimental to city development, as unpaid taxes hinder government projects.
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