The Kolkata Municipal Corporation (KMC) will introduce a graded waiver plan for property tax defaulters from August 1 where the penalty and interest to be deducted will depend on the period of default.

The KMC had earlier decided to introduce the graded waiver plan from April 1 but kept it on hold after Lok Sabha elections were announced.

Under the existing system, tax defaulters are offered waiver up to 99 per cent of the penalty and up to 50 per cent of the interest on the outstanding tax, irrespective of the duration of default.

KMC officials said in almost all cases, the maximum waiver is granted to applicants. This is going to change.

In the new plan, those who have not paid their property tax for more than 10 years will be allowed 35 per cent waiver on interest and 25 per cent of the penalty.

Defaulters for more than five but less than 10 years will get 40 per cent waiver on interest and 50 per cent on penalty.

For taxes that have remained unpaid for more than two years but less than five years, 45 per cent interest can be waived and 99 per cent of the penalty amount can be waived.

Only those who have not paid property tax for less than two years will get 50 per cent of interest and 99 per cent of the penalty amount.

“The new system has defined how much waiver one will get and also defined the duration of default for which that waiver will be applicable,” said a KMC official.

The civic body’s mayoral council on Friday decided to introduce the new plan from August 1. Friday’s meeting was the first of the mayoral council since Lok Sabha
elections were declared on March 16.

All applications under the new system will be forwarded to the mayor, who will decide whether to allow the exemption or not. In the existing system, too, the waiver depends on the mayor’s discretion.

Sources in the KMC said they have received many applications for waiver on accrued penalty and interest from April 1, which is the first day of the new financial year.

The KMC could not take any decision on these applications as the Lok Sabha elections had been declared and officials said granting a waiver could have been a case of breach of model code of conduct.

“All applications received from April 1 till July 31 will be allowed up to 99 per cent waiver on penalty and upto 50 per cent waiver on interest,” said a KMC official.

Mayor Firhad Hakim’s budget speech had mentioned the introduction of the graded waiver plan.

“In order to deter habitual defaulters and encourage assessees who make timely payment, we are introducing a graded system in which assessees who have defaulted in payment for a longer time will get, subject to approval, waiver at reduced rate,” Hakim said in his speech.

But property owners who pay their tax timely have said that waivers for tax defaulters should be discontinued as it did not reward those who paid property tax on time.

A KMC official said the civic body offered rebates on total tax amount to those who paid tax on time.