A new graded waiver plan for property tax defaulters where the penalty and interest to be deducted depends on the period of default has come into effect.

Under the new system, which was introduced on Thursday, those who have defaulted for a shorter period will be entitled to a higher waiver.

The Kolkata Municipal Corporation (KMC) had planned to introduce the new waiver system on April 1 but had to delay the implementation after the Lok Sabha elections were announced.

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

Defaulters for more than five but less than 10 years are entitled to a 40 per cent waiver on interest and 50 per cent waiver on penalty.

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

Those who have not paid property tax for less than two years can have 50 per cent of the interest and 99 per cent of the penalty waived.

Under the old system, tax defaulters were offered a waiver of “up to” 99 per cent of the penalty and “up to” 50 per cent of the interest on the outstanding tax. KMC officials said all defaulters were given 99 per cent waiver on the penalty and 50 per cent waiver on the interest irrespective of the default duration.

“Even in the new system, the mayor will have the power to waive 50 per cent of interest and 99 per cent of the penalty amount irrespective of the number of years the tax remains unpaid. This will be used in exceptional cases, unlike earlier when it was the norm,” said a KMC official.

Taxpayers who pay their annual property tax on time have for long complained against the waiver for defaulters.

To counter this, a KMC official says the civic body offers rebates to those who pay on time. If a quarter’s tax is paid within the due date, the property owner gets a rebate. The owner gets an additional rebate if the entire year’s tax is paid by the due date for the first quarter.

KMC sources said those who had applied within July 31 will be given a waiver according to the old plan. But those whose waiver request had been approved under the old scheme but have not paid the dues will now have to pay in compliance with the new rules.

KMC sources said they are working on a proposal to let defaulters see the amount they have to pay (under the new plan) on the Kolkata Municipal Corporation’s website.

“This is necessary for transparency and also because taxpayers should know how much money they have to pay,” an official said.

Mayor Firhad Hakim spoke about the graded waiver plan while presenting the civic budget for 2024-25.

The Opposition in the KMC had demanded that the civic authorities publish a list of defaulters.