MCD & NDMC Propose Reforms To Simplify Property Tax Assessment

Time of India

7 hours ago

New Delhi: To simplify the assessment of property tax and reduce chances of harassment to citizens, both the Municipal Corporation of Delhi and the New Delhi Municipal Council have proposed various reforms under the Jan Vishwas (Amendment of Provisions) Bill, 2025.
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The civic bodies proposed the conversion of imprisonment and fines into penalties for lapses or violations across several sectors mentioned under the DMC and NDMC Acts.
According to the proposals in the bill, NDMC wants to implement the unit area method for the calculation of property tax instead of the rateable value of property for all properties in Lutyens' Delhi. Officials said this method was applicable in MCD areas since 2003-04, but only in certain places under NDMC.
"This formula was implemented in NDMC from April 1, 2009, by incorporating it into a bye-law without amending the law," an official said. "Due to lack of any provision in the law for this, Delhi High Court quashed it in 2017. The Supreme Court upheld the high court decision in 2019, remarking that rateable value method could be implemented by amending the original Act."
Meanwhile, traders in markets like Connaught Place, who are issued property tax bills as per the rateable or rental value method, have been consistently demanding changes and implementation of the unit area method for property tax calculation.
Officials also accepted that the unit area method, which calculates property tax on the basis of six factors, namely unit area value, area of property, use factor, structure factor, age factor and tax rate, would bring transparency and fairness in tax determination. "However, adopting the unit area method will need changes in 47 provisions of the NDMC act," revealed an official.
New Delhi Municipal Council proposes, in total, changes in the mode of decriminalisation in 105 provisions under the Act.
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This includes the conversion of imprisonment in certain cases to penalties, such as Section 298 ((1)& (2)) for the absence of sweepers, etc., from duty without notice. It also proposed the conversion of imprisonment and fines into penalties in some cases, such as Section 390 related to breaches of bye-laws.
MCD has also proposed changes in the current legislation. One pertains to Section 123D (i) of DMC Act for 'no such assessment of property tax shall be done after the lapse of seven years from the closing of that assessment year.'
"This means that MCD can carry out the assessment of tax for a property and generate bills at the most for seven years, unlike now when the civic body is raising bills from 2004 onwards (when the amnesty scheme was not in force) for properties where no tax was paid at all," explained an official.
It also suggested changes in Section 153, which mandates that when a tax becomes due, the commissioner of MCD must present a bill for the amount due to the person liable for payment.
MCD has proposed changes in its subsection I, which clarifies that the bill would be raised 'after carrying out a physical survey or collection of relevant data in respect of that property if it is being assessed for the first time.'
Municipal Corporation of Delhi has also proposed amendments suggesting penalties for infractions as listed under Section 461 of the Delhi Municipal Corporation Act, which prescribes punishment or fines (as decided by the court or the civic body) for not disclosing property tax liabilities, not giving notice prior to the erection of a new building, not providing an instrument of transfer, and failure to give notice of devolution of land and building and other offences that lead to severe punishment.