A Toolkit for Property Tax Reforms

A Toolkit for
Property
Tax Reforms
Volume 1

Ministry of Housing and Urban Affairs

Government of India

1
2
 A Toolkit for Property Tax Reforms

TABLE OF CONTENTS

01
Introduction 8
What was the impetus for creating the Toolkit? 9
How is the Toolkit organized? 10

02
Executive Summary 12

03
Enumeration 18
Key Messages 19
What are the current practices? 19
What are the key challenges? 20
What are the recommendations? 21
How to implement the recommendations? 24

3
 04
Valuation 30
Key Messages 31
What are the current practices? 31
What are the key challenges? 34
What are the recommendations? 35
How to implement the recommendations? 36

05
Assessment 40
Key Messages 41
What are the current practices? 41
What are the key challenges? 42
What are the recommendations? 43
How to implement the recommendations? 44

4
 A Toolkit for Property Tax Reforms

06
Billing and Collection 46
Key Messages 47
What are the current practices? 47
What are the key challenges? 48
What are the recommendations? 49
How to implement the recommendations? 52

07
Reporting 54
Key Messages 55
What are the current practices? 55
What are the recommendations? 55

08
Annexures 56
Annexure 1: List of reports for reference/additional reading 56
Annexure 2: List of State Acts that were referred for the Toolkit 57
Annexure 3: List of Cities studied for the Toolkit 58

5
 Consultative Group of Ministers on Property Tax Reforms in India
• Shri Hardeep Singh Puri
Hon’ble Minister of State (I/C), Ministry of Housing and Urban Affairs (Chairperson)

• Shri Pratap Jena

Hon’ble Minister, Housing and Urban Development, State of Odisha

• Shri Brahm Mohindra

Hon’ble Minister (Cabinet Minister), Local Government, State of Punjab

• Shri S.P. Velumani

Hon’ble Minister, Municipal Administration and Rural Development,
State of Tamil Nadu

• Shri Ashutosh Tandon

Hon’ble Minister, Urban Development, Urban Employment and Poverty Alleviation,
State of Uttar Pradesh

• Shri Vijay Rupani

Hon’ble Chief Minister and Minister for Urban Development, State of Gujarat

• Shri Biplab Kumar Deb

Hon’ble Chief Minister and Minister for Urban Development, State of Tripura

Supported by

Steering Committee of Secretaries

• Shri Durga Shanker Mishra
Secretary, Ministry of Housing and Urban Affairs (Chairperson)

• Shri Mukesh Puri

Additional Chief Secretary, Urban Development and Housing Department,
Govt. of Gujarat

• Shri G. Mathi Vathanan

Principal Secretary, Department of Housing and Urban Development, Govt. of Odisha

• Shri Sarvjit Singh

Principal Secretary, Housing and Urban Development, Govt. of Punjab

• Shri Harmander Singh

Principal Secretary, Housing and Urban Development, Govt. of Tamil Nadu

• Shri Gitte Kiran Kumar

Special Secretary, Urban Development, Govt. of Tripura

• Shri Deepak Kumar

Principal Secretary, Urban Development, Govt. of Uttar Pradesh

Knowledge Partner:
Janaagraha Centre for Citizenship and Democracy

6
 A Toolkit for Property Tax Reforms

MESSAGES

The Government of India’s flagship schemes and

missions have since 2014 set our cities on a path
of unprecedented transformation. However such
transformation is sustainable over the long-term
only if our Cities progressively achieve greater
degrees of financial self-sufficiency. Urban Local
Bodies need to therefore urgently improve the share
of own revenues in their total revenues to sustain
the current trajectory of urban transformation.
Hardeep Singh Puri This Toolkit is a step in that direction and marks
Hon’ble Minister of State (I/C),
a new phase of sustained focus on the agenda of
Ministry of Housing and
municipal finance reforms. Atmanirbhar Bharat
Urban Affairs
certainly needs Atmanirbhar Cities, and our Ministry
is committed to catalysing them in partnership
with States.

Property tax is presently the single highest

contributor to own revenues of Urban Local Bodies.
The emphasis of both the XV Finance Commission
and the Atmanirbhar Bharat Abhiyan on property
tax reforms is therefore pertinent and timely. I
am certain that this Toolkit will serve States and
Cities well in designing and implementing much
needed reforms in property tax. We will continue
to sharpen focus on municipal own revenue
Durga Shanker Mishra enhancement, create an enabling ecosystem for
Secretary, Ministry of municipal borrowings and strengthen municipal
Housing and Urban Affairs capacities by leveraging www.cityfinance.in, the
national platform for municipal finance which our
Ministry launched in June 2020.

7
 01
InTRoDuCTIon

8
 A Toolkit for Property Tax Reforms

WHAT WAS THE IMPETuS foR CREATInG THE

ToolKIT?
XV Finance Commission report for 2020-21 and the Atmanirbhar Bharat
Abhiyan (additional borrowing of 2% of GSDP to States for 2020-21) call
for reforms in Property Tax
The XV Finance Commission in its Report for 2020-21 States that for Urban Local Bodies
(ULBs) to qualify for grants from 2021-22 onwards, States have to notify floor rates for
property tax and thereafter show consistent improvement in collection in tandem with
the growth rate of State’s own GSDP. The Ministry of Finance, as part of the additional
borrowing of 2% of GSDP to States for 2020-21 under the Atmanirbhar Bharat Abhiyan,
has also called for States to reform property tax valuation (linked to 0.25% of the
additional borrowing), by linking floor rates to prevailing guidance values/circle rates
and putting in a system for periodic revision of property tax rates (similarly for user
charges) in line with increase in price.

The Ministry of Housing and Urban Affairs is the nodal Ministry for
monitoring compliance with property tax reforms under both of the above
The Ministry of Housing and Urban Affairs (MoHUA) has constituted a Consultative Group
of State Urban Development Ministers with regional representation from Gujarat, Odisha,
Punjab, Tamil Nadu, Tripura and Uttar Pradesh, under the chairmanship of Union Minister
of State (I/c), Housing and Urban Affairs. To support the Consultative Group, a Steering
Committee has been constituted under the chairmanship of Secretary, MoHUA, with
Principal Secretaries, Urban Development Departments of the above mentioned 6 States
as members. The Consultative Group of Ministers supported by the Steering Committee
of Secretaries will study the various available models for effective estimation, periodical
review and collection of property tax and thereafter, propose required reforms in process
and amendments, if any, in State Municipal Laws to improve property tax collections.

In order to assist the Consultative Group and Steering Committee, MoHUA has entrusted
Janaagraha Centre for Citizenship and Democracy to undertake a landscape study of
property taxation in Indian States and Cities with a focus on best practices that are
scalable. For this study, property tax provisions of Municipal Acts of 28 States and
property tax Rules of 30 cities were reviewed. Current and best practices of 20 Urban
Local Bodies (ULBs) in 7 States (Chhattisgarh, Jharkhand, Karnataka, Maharashtra,
Odisha, Punjab and Telangana) were studied in detail through field visits and interviews
of over 50 stakeholders ranging from Principal Secretaries to Revenue Officers. These 20
cities are spread across different population categories.

9
 HoW IS THE ToolKIT oRGAnIzED?
The Toolkit provides reform recommendations based on best practices
and a step-wise implementation plan
This Toolkit focuses on what States and ULBs can do to fulfill the vision enshrined in the
present calls for reforms and similar reform calls made in previous schemes like JNNURM,
AMRUT and reports of XIII and XIV Finance Commission. It acknowledges a need for new
impetus to be given to the design and implementation of property tax reforms in India.
While there are many publications that provide a deeper understanding of property tax
theory and practice, this Toolkit provides actionable recommendations based on best
practices that are already working on the ground, and a step-wise implementation plan
for adoption of the same.

The Toolkit organizes the reform agendas into 5 sections to cover the 5
stages of the lifecycle of property tax
It is important to note that each of the 5 sections are inter-related, thus making it
essential for reforms to be undertaken in each stage in a lifecycle approach, rather than
in a piecemeal fashion.
Each section covers the following –
1. Landscape of current legislative and on-ground practices in property taxation
2. Issues and implementation challenges with current practices
3. Reform recommendations that States/ULBs can undertake to overcome these issues
and
4. Step-wise implementation plans

10
 A Toolkit for Property Tax Reforms

Reform recommendations in each stage of the lifecycle have been framed

as responses to issues and implementation challenges, sharply addressing
what needs to be done and how it needs to be done
In each section, reform recommendations have been framed as responses to issues and
implementation challenges, sharply addressing the most relevant “what to do” and “how
to do” questions; our endeavor has been to make this most actionable and easy-to-
use for practitioners on the ground. Best practices of select States and ULBs have also
been provided as templates that can be replicated or built upon. These best practices
have been provided in the form of Boxes at relevant places in the chapters for ease of
reference. The Toolkit provides a list of reports and case studies for further reading.

As a first step to enable these reforms, MoHUA has published this Toolkit
that will be available in both print and digital formats
MoHUA has published this Toolkit to provide an easy to use handbook for policymakers
who are interested in property tax reforms. This is the first step towards enabling the
reforms envisaged under the XV Finance Commission and additional borrowing of 2% of
GSDP to States. This Toolkit will also be available in digital format on www.cityfinance.in.

11
 02
ExECuTIVE
SuMMARy

12
 A Toolkit for Property Tax Reforms

ULBs do not generate sufficient own revenues to meet their infrastructure

expenditure obligations
India is urbanising rapidly, with urban population expected to rise from approximately 40
crores presently to over 60 crores by 2030 and over 80 crores by 2050, by which time
urban population is likely to constitute over 50% of the total population. The High Powered
Expert Committee for Estimating the Investment Requirements for Urban Infrastructure
Services estimated the expenditure required to finance urban infrastructure and services
at Rs. 39.2 lakh crores during 2011-2031. However, ULBs that bear a large percentage of
this expenditure obligation currently do not generate sufficient own revenues to finance
this expenditure, even after considering fiscal transfers and various forms of assistance
from Central and State Governments.

The aspiration for property tax collections should be to reach Rs. 40,000
crores in 2024 from the current estimate of approximately Rs. 20,000
crores
Property tax forms a majority of the own revenues of ULBs. An estimate of property
tax from the financial statements of over 1,000 ULBs pegs the national property tax
collections at approximately Rs. 20,000 crores. This is far lower than peer countries and
investment required in urban infrastructure. Subject to COVID-19 impact, ULBs should
aspire to double this to Rs 40,000 crores by 2024 (Compounded Annual Growth Rate
(CAGR) of approximately 18%).

Estimate contribution to total:

41% 15% 12% 16% 16%

Popl. Category: >4M 1M-4M 500K-1M 100K-500K <100K

To achieve this aspiration, a “Whole of Systems” transformation is required

comprising the entire lifecycle of property tax
In order to meet such an aspiration, a comprehensive approach to property tax reforms is
required as opposed to a piecemeal approach. This would involve simultaneous reforms
in all 5 stages of the property tax lifecycle given below.
1. Enumeration - Count of properties is complete and accurate, and updated regularly
2. Valuation - All properties are valued appropriately for the purpose of taxation
3. Assessment - All self-assessments are adequately verified on the field, and re-
assessments are done periodically and captured in the property register
4. Billing and Collections - All properties are billed/self-assessed and property tax is
collected from all properties that have been billed/self-assessed
5. Reporting - Property tax data is reported accurately and reviewed systematically as
part of MIS reports and dashboards that inform decision-making

13
 The current landscape and associated issues and recommendations have been summarized below
Stage of Prop- Current Practice Issues Recommendations
erty Tax Life-
cycle
Enumeration Manual creation of Incomplete and Proper implementation
property records inaccurate records; no and adoption of GIS-based
single source of truth digital property register
including -
• GIS mapping is
completed
Creation of digital Prone to human errors
• Field survey is
property records by leading to incomplete
conducted to check
digitizing existing and inaccurate records
the veracity of GIS
property records
maps
through manual
• Existing records
input of data with or
are digitized and
without field survey
integrated with the GIS
maps
• Adequate capacity is
built within the ULB
to maintain the digital
register

Manual updation of Ad-hoc at the Single digital property

property registers discretion of revenue database used by all
officials; staff shortages Municipal Depts. and
leading to incomplete eventually relevant State
and inaccurate records depts. as well (stamp
duties and registration,
power etc.)

Most State Acts do Ad-hoc updation of Enumeration to be

not have a robust property registers mandated in State Acts/
legal provision for leading to incomplete Rules
regular enumeration records

14
 A Toolkit for Property Tax Reforms

Stage of Prop- Current Practice Issues Recommendations

erty Tax Life-
cycle
Valuation 11 States follow Criteria used for All cities adopt the capital
Annual Rental Value arriving at the ARV valuation method with
method (ARV) is not prescribed modifications to ensure
and ARV is generally minimal multiplicative
assigned on ad-hoc factors and a provision
basis; for regular updation of
There is no credible property tax in line with
source for assessing increase in guidance value
market rental values

9 States follow UAV is prescribed

Unit Area Value without clear linkage to
method (UAV) with underlying factors
or without direct
linkage to guidance If guidance value is not
value prescribed as one of
the underlying factors,
property tax is not
buoyant
3 States follow Guidance values
Capital Value are not updated for
method (CV) property tax calculation

Use of several
multiplicative factors
complicates the
formula and reduces
ease of compliance

15
 Stage of Prop- Current Practice Issues Recommendations
erty Tax Life-
cycle
Assessment Physical assessment At the discretion of the An online Self-Assessment
is conducted for all revenue official; staff mechanism with a system
properties shortages may also for raising demand/
lead to incomplete and sending reminders and
inaccurate records conducting random
scrutiny of assessment
forms

Self-Assessment is No check in place for

conducted without a inaccurate information;
system for scrutiny

Self-Assessment is Compliance rates are

conducted without low
a system for raising
demand/sending
reminders

Broad-based Depressed tax base; Exemptions should be

exemptions without inequity in tax burden based on a rationale
a well-defined that is clearly defined in
rationale the State Acts. Revenue
foregone as a result of
exemptions should be
included in annual budgets
of Municipalities

Weak dispute Increased Dispute redressal

redressal mechanism administrative burden; mechanism to be simplified
– no mechanism depressed tax base with involvement of
OR civil courts Commissioner/Divisional
OR assessment or Regional Commissioners
tribunals/property or DMs (depending on
tax boards (last of the State)/DMAs or DLBs;
which are generally include provision for
ineffective) upfront remittance of 50%
of disputed amount

16
 A Toolkit for Property Tax Reforms

Stage of Prop- Current Practice Issues Recommendations

erty Tax Life-
cycle
Billing and No process for Low compliance rates Automatic digital bills are
Collection billing or reminders generated from the digital
database and reminders
Paper-based billing Staff shortages leading are sent via SMS
with door-to-door to incomplete billing
distribution

Manual door-to- Low collection Technological interventions

door collections efficiency; weak combining-
with cash-heavy collection system prone a digital property tax
transactions to leakages register + integrated billing
+digital payments (mobile
+ internet + handheld
point of sale devices) +
a dedicated cadre of tax
collectors /Outsourcing of
collections

Weak provisions for Low compliance rates Stronger penal provisions

penalizing defaulters mandated in State Acts

Reporting No MIS OR MIS not Ad-hoc decision Quarterly reviews of

reviewed at periodic making; no property tax MIS at city/
intervals OR not performance ward/revenue official
integrated with management level; Ranking of revenue
decision making officials based on the
and performance MIS to motivate through
management of rewards and recognition,
teams/individuals foster adoption of best
practices
Demand and Low compliance rates Publish ward-wise demand
Collection data and collection data,
is not available in especially defaulters’ data,
public domain in public domain

MoHUA will support implementation of property tax reforms through

a National initiative of technical assistance to States and ULBs called
PRAPTI-Policy and Reforms for Augmentation of Property Tax in India
A PRAPTI unit will be set up at MoHUA as a dedicated team that focusses on effective
implementation of property tax reforms. Under this initiative, MoHUA will implement a
PRAPTI Fellowship to provide a cadre of trained Fellows to States for technical assistance
and human resource support. Along with this, the following will be enabled on www.
cityfinance.in (an online portal of the MoHUA focused on municipal finance) -
1. national/State Ranking of ulBs/Wards/Revenue officials, and peer learning and
rewards and recognition program to motivate revenue officials
2. Quarterly Property Tax MIS
3. Modeling tools for estimating property tax potential and valuation scenarios
17
 03
EnuMERATIon

18
 A Toolkit for Property Tax Reforms

KEy MESSAGES
There is still widespread use of manual, paper-based systems for creation and maintenance
of property registers. Adoption of GIS-based digital register has been patchy with no
process in place for regular updation. Proper implementation and adoption of GIS-based
digital property registers, creation of a single digital property register for all municipal
taxes, fees and user charges and also other purposes (eventually also across databases
of power/water utilities, stamps and registration dept etc.) and a legal mandate for
periodic updation can ensure complete and accurate property records.

WHAT ARE THE CuRREnT PRACTICES?

Enumeration means counting of properties for the purpose of taxation. In practical terms,
this entails the creation and maintenance of a property register. The ideal process of
enumeration should ensure completeness and accuracy of records. Thus, all properties
that are legally in the tax net should be recorded in the tax register and this register
should be regularly updated to capture any new properties or changes to existing
properties’ attributes. The existing landscape of current practices in enumeration has
been described in the flowchart below (good practices have been highlighted in green).

GIS Based
Based on
Physical survey
Digital register
Existing property
Creation of records are digitized
a Property
No survey
Tax register
Physical register

Regular updation
Based on physical mandated in State Acts/Rules
survey of existing
properties and
Maintenance survey of city areas Ad-hoc – at the
of Property for new properties discretion of the ULB
Tax register

Integration with Single digital property

databases register used by all the Depts.
maintained by
other Municipal System for clearance of dues
Depts. and State before new registrations,
Revenue Dept. renewals, loan sanction etc.
automated or otherwise

19
 WHAT ARE THE KEy CHAllEnGES?
Physical registers maintained through manual updation lead to incomplete
and inaccurate records
Manual records are generally prone to errors, both in terms of completeness and accuracy.
They could also result in greater degrees of discretion of officials.

While GIS-based property mapping has been adopted by several States

and cities, implementation has been patchy and there is no coherent plan
for regular updation
While GIS mapping ensures completeness of property records to a large extent, four
principal gaps remain. First, there is no provision for regular updation post GIS mapping
is complete either by mandatory linkage to other department databases or otherwise.
Second, there is no institutional mechanism to ensure continuity beyond a one-time
exercise, including knowledge transfer and creation of capabilities within the ULB or
State intermediaries. Third, some cities have undertaken GIS-based surveys but have
not integrated the survey data with their existing property tax database, rendering the
exercise futile. Fourth, the smaller cities, which are largely dependent on grants to keep
pace with their daily expenditure cannot afford even a one-time GIS mapping exercise.

The lack of a robust provision for periodic enumeration in State Acts

results in incomplete property registers over a period of time
Majority of the State Acts do not have clear provisions for regular enumeration of
properties. Only 5 States i.e. Andhra Pradesh, Chhattisgarh, Goa, Madhya Pradesh and
Manipur have a provision for “periodic assessment of city areas” within a fixed period
of time. 5 States i.e. Gujarat, Karnataka (only in Municipal Corporation Act), Tamil
Nadu (only in Municipal Councils), Uttar Pradesh and Uttarakhand have a provision for
“creation of a new assessment list” or “revision of assessment” at a fixed interval of time.
This ensures revision of assessment of existing properties but does not include coverage
of new properties.

There is a lack of standardized address nomenclature in cities making it

difficult to integrate different property databases
There is a lack of standardized address nomenclature in Indian cities. Even street names
in cities may not be unique, resulting in difficulty in integration across databases. This
challenge also results in difficulties in a wide range of field activities such as surveys,
reassessments etc. Few States and cities are beginning to adopt standardized door
numbering linked to GIS/other tech enabled back end systems to overcome this
challenge.

20
 A Toolkit for Property Tax Reforms

The staffing deficit in ULBs render regular field work difficult

There is generally fairly acute staffing deficit in ULBs i.e. the number of working posts
against sanctioned posts (average of 35% for 25 of the largest ULBs including State
capitals, sometimes going beyond 60% for smaller ULBs). This applies to the revenue
department as well, impacting both assessment and collections in a substantially non-
digital environment.

WHAT ARE THE RECoMMEnDATIonS?

Recommendation 1

Creation of a GIS-based digital property register – This has been undertaken by several
States and cities. One such case is the Raipur Municipal Corporation that has been
illustrated in Box 1 below.

Box 1 – GIS-based Municipal Tax and fee Collections System

in Raipur
Pre-Project Situation

Raipur Municipal Corporation (RMC) up until FY 17-18 had a manual system for
property enumeration, assessment and billing. The coverage of properties in the
tax net was low. The manual billing system led to delayed billing and leakages.

Project Details

In 2018 RMC launched a GIS based and IT enabled property tax software under
Capacity Building for Urban Development programme of the Ministry of Housing
and Urban Affairs. With the support of an external agency, RMC created GIS maps
of the city through drone imaging and supported this with door-to-door surveys
conducted using a specially developed mobile app. Data was ratified by the ULB
authorities and a digital property register was created. The legacy demand and
collection books were also digitized and integrated with the GIS-based digital
register.

Results

This system is now being used to generate demand and collect taxes. The new
system led to introduction of about 54,000 new properties into the tax net within
a single financial year. RMC also recorded an additional property tax demand of
Rs. 41 crores, a 74% increase from the previous year’s demand. The survey also
enabled classification of properties basis usage i.e. commercial, residential and
mixed-use that helped in better enforcement.

21
 Few States like Odisha and selected cities in different States are also embarking on
Digital Door Numbering with linkages to GIS-based mapping to ensure all properties are
mapped and assigned Unique Property IDs (UPIDs)

Recommendation 2

Mandate, periodic enumeration in State Acts

Recommendation 3

Maintenance of a single digital property database – This has been undertaken in part by
a few States and cities. Andhra Pradesh has created a single digital property register for
property tax, and water and sewerage charges. Punjab is in the process of integrating
the property tax register to the electricity distribution database. Both the cases have
been summarized in Boxes 2 and 3 below.

Box 2: Creation of a Single Digital Repository of Property

Data in Andhra Pradesh
Pre-Project Situation

Separate bills were generated by all Municipal Departments prior to FY 17-18.

There was no single version of truth to ascertain the number of properties in
the tax net, property tax demand figure, tax collection and arrear data. Property
tax administration was not based on data-driven decision making. Collection
efficiency and the coverage of properties were low.

Project Details

The State Government partnered with eGovernments Foundation, a non-profit

organization in FY 15-16 to, among other things, digitize property tax records,
increase channels and modes of payments and introduce data-based performance
management system for the tax collectors. The property tax records were
corrected through a field survey to ensure that accurate and complete records
were digitized. Digital integrated billing for property tax, water and sewerage
charges was enabled that ensured timely billing within the first week of the
FY. GIS based property tax module was created that had revenue dashboards
for tracking tax collector wise performance. Multiple channels of payment like
ward offices, bank branches and citizen service centers were introduced. Online
payments system through website and mobile based app was created to boost
digital payments.

22
 A Toolkit for Property Tax Reforms

Results

These interventions led to 25% increase in coverage and improved collection

efficiency by 30% between FY 15-16 and FY 18-19. There was a 111% increase in
revenues. Single digital annual bill is generated with property, water & sewerage
charges reducing the number of bills from 7 to 1 per year.

Box 3: Database Integration of Property Tax Database with

Electricity Distribution Database in Punjab (Work initiated and in
progress)

Pre-Project Situation

The property database used by the property tax departments of ULBs was not
integrated with any utility database. Property tax department relied on manual
surveys or costly technological interventions for updation of property records.
99% of the properties have electricity connections. Thus, electricity distribution
database is largely complete.

Project Details

The Punjab Municipal Infrastructure Development Company (PMIDC), a non-profit

company constituted by the Department of Local Self-Government, Government
of Punjab is currently undertaking a project to integrate the electricity distribution
database of Punjab State Power Corporation Ltd. with the property tax database
of ULBs. This project has been piloted in two cities, Khanna and Hoshiarpur. The
methodology adopted by PMIDC is to first create GIS base maps of the city and
provide each property a UPID. These maps are used by contracted surveyors
to conduct physical surveys. The surveyors identify individual properties against
the map, note down the electricity meter numbers of the property and make
requisite corrections in the map. The information thus collected enables mapping
of property tax IDs to electricity meter numbers. These meter numbers are then
verified with electricity distribution companies and information regarding the
property attributes and owner details are obtained. The property tax register is
accordingly updated.

Results

While this survey is complete, PMIDC is yet to integrate the information collected
from the surveys to the existing property tax registers. They plan to extend this
project to other cities in Punjab.

23
 HoW To IMPlEMEnT THE RECoMMEnDATIonS?

for Recommendation 1
- Adoption of GIS-based digital property register

Step I
Selecting an entity to implement GIS mapping
Tender out creation of digital GIS-based register to a private agency OR commission the
same to an existing institution with the required capabilities. This can be done as a State-
wide project for all ULBs to make it economically viable for smaller Municipalities. For
example, Punjab Municipal Infrastructure Development Company is a non-profit making
company constituted by the Department of Local Government that is undertaking GIS
mapping of cities in Punjab. Large Municipal Corporations may choose to tender out/
commission the work separately as well.

Step 2
Procure high-resolution satellite images and create a digital base map of the
city
The first step for GIS mapping involves procuring high-resolution satellite images of all
areas of the city. Our interviews with select agencies that undertake GIS mapping ULBs
revealed the following options provided in table 1 below (a more systematic study may
be required to compile a complete list with further details) –

Table 1: Available options for procurement of satellite images for GIS mapping
option Resolu- Cost Remarks
tion
Archive satellite Very low Minimal Minimum features like property
images from Google processing location are available- can be
open source platform cost used by smaller Councils/Nagar
Panchayats (For e.g. – Mandi
Nagar Parishad )
Archive satellite 50 cm Rs 3,000- Few features like property
images from National (low) 4,000 per sq. location and property size are
Remote Sensing km. available; manual field survey is
Centre (NRSC) necessary to ensure accuracy
Latest updated 30 cm Rs. 7,000- Few features like property
satellite images from (high) 8,000 per sq. location and property size are
NRSC km. available; manual field survey is
required to establish usage of
property (For e.g. – Ludhiana
Municipal Corporation)
Drone imaging Very high Rs. 10,000- Several features like property
12,000 per sq. location, property size,
km. individual floor size and even
usage of property can be
discerned; minimizes the need
for a field survey (For e.g. –
Raipur Municipal Corporation)
Source: Interviews with private agencies that undertake GIS mapping in ULBs
24
 A Toolkit for Property Tax Reforms

The next step is to digitize the images and create a city-wide base map that captures
all the required physical features of the city including geo-tagged property locations.
Contour-based height modelling can also be done to ascertain the height of individual
properties and the number of floors at the mapping stage itself.

Step 3
Creation of a digital database of properties
Creation of a digital database of properties involves the following sub-steps –
1. Divide the city into equal-sized blocks/sectors with similar count of properties in
each block.
2. Assign each property a UPID which encapsulates the sector or block number and the
geo-tagged coordinates.
3. Digitize existing property records and assign UPIDs to the properties in the record.

Step 4
Conduct door-to-door survey for on-ground verification
The following are the sub-steps required for conducting door-to-door survey -
1. Create a web-based database and a complementary mobile application with the
records of the existing properties and the UPIDs of the new properties identified
through GIS mapping.
2. Send surveyors equipped with mobile devices for accessing the application for
on-ground field survey. The surveyors conduct a thorough door-to-door survey
that captures all attributes of the properties. The surveyors can also obtain digital
signature of property owners/occupiers on the captured attributes and render more
transparency to the process.
3. The data captured in the survey needs to be updated in real-time in the digital
property register.

Step 5
Build capacities within the staff/hire contractual staff/outsource to maintain GIS-
based digital property register
Capacity Building would be required to ensure that existing staff are adequately equipped
to manage and maintain the GIS-based digital property database. Alternatives for ULBs
include hiring contractual GIS experts or outsourcing the maintenance to agencies or
firms specialized in the same.

25
 for Recommendation 2
- Mandate Periodic Enumeration in State Acts

Prima facie, 19/28 State Acts do not have a clear provision for periodic enumeration of
city areas for bringing new properties into the tax net. However, from close examination of
the statutory provisions, it has been ascertained that the following actions are required–

1. State Acts that need to supplement existing provisions with rules specifying the
technology to be used for periodic enumeration
5/28 States have a provision for periodic assessment of city areas within a fixed
period of time. (4 States specify for all ULBs and 1 State for only Municipal
Corporations (MCs)).These States need to supplement these provisions with rules,
including specification of methodology and/or technology to be used for such
periodic enumeration.

2. State Acts that need to supplement existing provisions with rules specifying that
All properties in the Municipal area should be assessed and the technology to be
used for periodic enumeration
5/28 States have a provision for creation of a ‘new assessment list’ or revision of
assessment at a fixed interval of time (3 States specify for all ULBs, 1 State for
only MCs and 1 State for only Municipal Councils). These provisions cover revision
of assessment of existing properties i.e. re-assessment, but do not cover periodic
enumeration of city areas for bringing new properties into the tax net. These States
need to supplement existing provisions with rules specifying that ALL properties
in the Municipal area should be assessed, and the methodology and technology to
be used for such periodic enumeration. 10/28 States have a provision for revision of
tax value at fixed interval of time (8 States specify for all ULBs, 1 State for only MCs
and 1 State for only Municipal Councils). These ensure that existing properties are
re-assessed basis the revised valuation but do not cover periodic enumeration. The
rules for these States should be supplemented in a similar way as above.

3. State Acts that require amendments

13/28 States do not have a provision for periodic enumeration or assessment or
valuation (8 States for all ULBs, 3 only for Municipal Councils and 2 only for MCs).
These States require amendments to the Acts.

The Table 2 below summarizes the State-wise statutory provisions for periodic
enumeration and the subsequent actions required for each category of State Acts.

26
 A Toolkit for Property Tax Reforms

Table 2: Summary of State-wise statutory provisions and actions required for periodic
enumeration
Existing types of provi- Reform required States
sions
Provision for periodic Property tax rules to include – Andhra Pradesh (only
assessment of city areas Methodology and technology MCs), Chhattisgarh, Goa,
within a fixed period of to be used for surveys. For e.g. Madhya Pradesh, Manipur
time GIS mapping to be undertaken
every fixed number of years
OR field manual survey to be
conducted every fixed number
of years
Provision for creation of Property tax rules to include Gujarat, Karnataka (only
a ‘new assessment list’ or 1. Physical survey/GIS map- MCs), Tamil Nadu (only
revision of assessment at ping to be conducted for Councils), Uttar Pradesh
a fixed interval of time. property survey along with and Uttarakhand
These provisions allude assessment list revision
to revision of assessment 2. Fixed period in which this
of existing properties but should be done
do not cover periodic
enumeration of city
areas for bringing new
properties into the tax
net.
Provision for revision of Property tax rules to include Haryana (only MCs), Hi-
tax value at fixed inter- 1. Physical survey/GIS map- machal Pradesh, Kerala,
val of time ( while this ping to be conducted for Maharashtra, Meghalaya,
ensures existing prop- property survey along with Nagaland, Odisha, Punjab
erties are re-assessed assessment list revision (only Councils), Sikkim,
basis revised valuation 2. Fixed period in which this West Bengal
this doesn’t provide for should be done
coverage of new prop-
erties through periodic
enumeration).
No provision OR left State Act to be amended to Andhra Pradesh (only
to the discretion of the include a provision for period- Councils), Arunachal
State/ULB ic survey of all areas of ULB Pradesh, Assam, Bihar,
within a fixed period of time Haryana(only Councils),
using GIS technology/field Jharkhand, Karnataka
survey (only Councils), Mizoram,
Punjab (only MCs), Ra-
jasthan, Tamil Nadu(only
MCs), Telangana, Tripura
Source- Statutory provisions in State Acts as per the list provided in Annexure 2 below

27
 for Recommendation 3
- Database Integration

Step I
Mandate the use of uPID
Mandate the use of UPIDs for the purpose of creation and maintenance of property
databases as well as for property tax billing and collections.

Step 2
Digitize existing property records
Digitise existing property records of other Municipal databases like water, sewerage,
electricity, trade license, building permission, etc.

Step 3
Map uPIDs to other Municipal databases
Conduct field survey OR get property owners to compulsorily provide utility information
at the time of property tax assessment to map UPIDs to utility reference numbers like
electricity meter number, water meter number, trade license number, building permission
ID, etc.

28
 A Toolkit for Property Tax Reforms

Step 4
Integrate other municipal databases with property tax database using the
uPID

Step 5
use the single digital property database for billing of all properties for taxes
and other fees and user charges

29
 04
VAluATIon

30
 A Toolkit for Property Tax Reforms

KEy MESSAGES
There are three valuation methodologies i.e. Annual Rental Value (ARV), Unit Area Value
(UAV) and Capital Value (CV) that are used by States, with multiple variations. These
methodologies vary across States and cities, both in legislation and in practice. ARV is
the most commonly used valuation methodology. The common aspect between ARV
and UAV is that in most States that use these methodologies, the values are prescribed
in an ad-hoc manner without clear linkage to underlying factors. The CV system, which
is followed in a few States, directly links property tax to the prevailing guidance value
as published by the Stamp Duties and Registration Department. However the property
value is generally depressed by virtue of several multiplicative factors that make the
system non-buoyant. Moreover, property tax valuations are not revised regularly in
tandem with increase in guidance values i.e. outdated guidance values may be used
for property taxation. To overcome these challenges, all cities should adopt the CV
system with minimum multiplicative factors and a provision for periodic increase linked
to increase in guidance value.

WHAT ARE THE CuRREnT PRACTICES?

Three methods i.e. the annual rental value method (ARV), unit area value
method (UAV) and the capital value method (CV) are currently used by
States in India
Valuation refers to the methodology used for assigning values to all properties for the
purpose of taxation. Three methods i.e. the annual rental value method (ARV), unit area
value method (UAV) and the capital value method (CV) are currently used by States in
India. Annual Rental Value is the most widely used valuation method in Indian States.
Table 3 tabulates the provisions on valuation methodology as per 28 State Acts.

Table 3: Summary of State-wise valuation methodology

Methodology No. of States State Names
Capital Value 2 1. Karnataka (all ULBs except Bengaluru)
method 2. Nagaland

Unit Area Value 9 1. Delhi

method 2. Gujarat
3. Himachal Pradesh
4. Jammu and Kashmir
5. Kerala
6. Mizoram
7. Odisha
8. Sikkim
9. Tripura

31
 Methodology No. of States State Names
Annual Rental 12 1. Andhra Pradesh
Value method 2. Assam (Guwahati)
3. Bihar
4. Chhattisgarh
5. Goa
6. Haryana
7. Jharkhand
8. Madhya Pradesh
9. Meghalaya
10. Tamil Nadu
11. Uttar Pradesh
12. Uttarakhand
Flat Rate 1 1. Punjab

Provide multiple 4 1. Maharashtra (Capital Value or Annual Rental

options for valua- Value)
tion methodology 2. Rajasthan (Unit Area based method or by any
other method)
3. Telangana (Capital Value or Annual Rental Val-
ue or any such method as prescribed)
4. West Bengal (Annual Rental Value or Capital
Value where Annual Rental Value cannot be
estimated)

State Acts where 2 1. Arunachal Pradesh (not mentioned)

valuation method- 2. Manipur (unclear)
ology is unclear
or not mentioned
Source- Statutory provisions in State Acts as per the list provided in Annexure 2 below

The valuation models used across States and cities vary in statutory
provisions and in practice
The interpretation of the definition of the methodologies in theory and in statutory
provisions and their implementation vary across States and even cities. Table 4
explains each valuation methodology from the lens of theoretical definition, legislative
interpretation and on-ground practice.

32
 A Toolkit for Property Tax Reforms

Table 4: Variation in Valuation Methodologies in theory, in legislation and in practice

Valuation Model In Legislation In Practice
Annual Rental Value • Criteria used is prescribed • Ad-hoc basis
(ARV) • Not formulaic • Without clear linkage
(followed in 12 States) • Left to the discretion of to criteria (All States)
Charged basis perceived the ULB
rent (Andhra Pradesh State
Acts mention the criteria
to be used for prescribing
the annual rental value and
leave it to the discretion of
the ULB to define the way
in which the criteria will be
incorporated)

Unit Area Value (UAV) • City is divided into ho- • UAV prescribed with-
(followed in 9 States) mogenous blocks (Delhi/ out clear linkage to
Formula based system Kolkata) factors (All States)
where unit area value • State/Property Tax Board • Flat rate is prescribed
is prescribed basis assigns unit area values (Punjab)
structure, usage, age, basis different factors • Unit area value of land
location, guidance value, is either directly linked
etc. to guidance value
(Bengaluru) or there is
no direct linkage (Del-
hi – guidance value
is mentioned as one
of the criteria basis
which unit area value
is prescribed)

Capital Value (CV) • Direct (Karnataka ex- • Guidance values not

(followed in 2 States) Bengaluru)/indirect revised for property
Charged basis market linkage (Nagaland) to tax calculation (All
rate guidance value ULBs in Karnataka
In Nagaland, guidance except Bengaluru)
value is mentioned as one • Several multiplicative
of the criteria to be used factors added mak-
for arriving at the land ing formula complex
value. But it is not stated (Mumbai- like structur-
how the criteria will be al characteristics, loca-
applied. tion, age, floor factor,
usage, occupancy)

33
 WHAT ARE THE KEy CHAllEnGES?
Valuation methodology should be buoyant and equitable, should minimize
cost of implementation and discretion, and should be easy to comply with
The methodology used for arriving at the value of a category of properties should
ensure that the basic principles of local taxes (Bird, 1994) i.e. buoyancy and equity are
upheld. To ensure that property taxes are buoyant sources of revenues, the valuations
used should reflect the actual (market) value of the property. The notions of horizontal
and vertical equity should be applicable as far as possible1. Horizontal equity means
that people in identical situations are given equal treatment. Vertical equity implies that
people with higher income pay more taxes. Achieving horizontal and vertical equity will
encourage willingness of citizens to pay taxes. The valuation methodology should leave
room for minimum or no discretion. High discretionary powers residing with revenue
officers at the time of assessment can lead to lower transparency, rent-seeking behavior,
reduce willingness of citizens to pay and consequently result in lower compliance rates
and collection efficiencies. Also, valuation methodology should be easy to administer
and comply with, with minimum cost of implementation.

The ARV method does not have a clear linkage to underlying factors and
is prescribed in an ad-hoc manner making the system less buoyant and
increasing the degree of discretion
In ARV method, there is a very tenuous linkage between the perceived rental values
and the actual market values. This is primarily due to the lack of credible database on
market rental values. In some cases actual rental receipts are considered, but they are at
the discretion of the taxpayers and might not represent the true rent payable. Moreover,
large discrepancies are caused by discretionary powers residing with revenue officials,
potentially depressing the tax base2.

In most States, UAV is prescribed without a clear linkage to underlying

factors and may not directly link property tax to guidance value
In UAV method, property tax might or might not be directly linked to guidance value.
Without clear linkage to underlying factors, UAV system becomes susceptible to high
degree of discretion of the property tax assessor.

Use of several multiplicative factors in UAV and CV method increases

complexity thus increasing cost of implementation and reducing ease of
compliance
Multiplicative Factors(MF) are required to maintain equity. However, numerous
multiplicative factors increase complexity and cost of implementation and reduce ease
of compliance. The tricky aspect of the CV method is maintaining balance between
keeping the system equitable through reasonable MFs on the one hand, and increasing
complexity along with cost of implementation by introducing more MF categories than
can be assessed comfortably, on the other.

1. Mohanty et al., 2007

34 2. Nath, S. 1987
 A Toolkit for Property Tax Reforms

Linkage to guidance value may not be sufficient condition to keep

property tax buoyant if guidance values are not updated for the purpose
of taxation
While the CV method and in some cases UAV method use guidance value as a principal
basis, the linkage between guidance value and the market value cannot be established
with certainty. The State is responsible for prescribing the guidance values of different
categories of properties and for different areas, and in several cases guidance values
are not updated in congruence with market values. Market values themselves are hard
to ascertain if there is understatement of property/transaction values for the purposes
of stamp duties and registration. It is also important to ensure that guidance values are
updated regularly for the purpose of property taxation.

Table 5: Comparison of the Valuation methodologies

Criteria ARV UAV CV
Equitability Low Moderate High
Buoyancy Low Moderate to High High

Cost of Implementation Moderate to High Low Low to High

Ease of Compliance High High Moderate to High
Degree of Discretion High Low Low

WHAT ARE THE RECoMMEnDATIonS?

Recommendation 1
- Adoption of Capital Value Method

All cities should adopt the Capital Value method with–

1. Direct linkage to guidance value
2. Minimum multiplicative factors

Recommendation 2
- Institutional mechanism for periodic rate revision

The State Acts should have a provision for regular updation of property tax in line
with increase in guidance value. Several States have Property Tax Boards or Municipal
Valuation Committees/Organizations for periodic re-valuation of properties. However,
these institutions may not be functioning as envisaged in most States and there may be
a need for re-imagining an institutional design for property tax valuation.

35
 HoW To IMPlEMEnT THE RECoMMEnDATIonS?

for Recommendation 1
- Adoption of Capital Value Method

Step I
Conduct valuation modelling for arriving at a suitable formula that links
property tax to guidance value with minimum multiplicative factors
Collect information on property-wise attributes and current collection figures of
representative areas from a few ULBs of each category (Municipal Corporations,
Municipal Councils, Nagar Panchayats). Create a valuation formula that directly links
land value to guidance value for each of the above mentioned regions and ULBs.

A model valuation formula is provided below –

Annual Value of Property = (Size of land in sq. unit.) X (Guidance value of land in sq.
unit.) + (Size of building in sq. unit.) X (Cost of Construction of the building)

Where, Guidance value of land is the value of land as prescribed by the Stamp Duties
and Registration Department of the State.

Cost of Construction of the building may be prescribed by the Public Works Department

Property Tax = Annual Value X Multiplicative Factors X Tax Rate

Create a valuation model with different tax rates to project possible increase in tax
for different types of properties. Introduce minimum multiplicative factors like age of
building or usage of building that are not already taken into account in the formula.

Step 2
finalise the formula
Finalise the formula keeping in mind that -
1. The formula should encompass all possible categories of properties i.e. residential,
commercial, industrial, hotels/malls, stadiums, vacant land, apartments, houses with
appurtenant land etc.
2. The formula should not be too complicated to administer
3. All the variables of the formula should be clearly defined so as to not leave any room
for discretion

36
 A Toolkit for Property Tax Reforms

Step 3
Make amendments to the statutory provisions in the Acts and/or Rules as
required to implement the new valuation system

Introduce transition provisions to smoothen the impact of incremental tax liability if any
over a period of time. For example, The Maharashtra State Act introduced transition
provisions when the State moved to the Capital Value system to reduce the anticipated
increase in tax demand. These transition provisions included the ceiling of the tax value
for the first five years of implementation of the Capital Value method. ‘For the period of 5
years from the date on which property tax is first levied on capital value, the tax shall not
exceed (i) in case of residential building, 2 times, (ii) in case of non-residential building, 3
times the amount of the property tax leviable in respect thereof in the year immediately
preceding such date. Provided that property tax levied on the basis of capital value of
any buildings or lands shall not exceed 40% of the amount of the property tax payable
in the year immediately preceding the year or such revision.’ Table 6 below provides
summaries of the existing statutory provisions as per State Acts and actions required for
enabling linkage to guidance value.

Table 6: Summary of enabling statutory provisions for linkage of property tax to

guidance value
Existing Provision Reform Required States

Property tax valuation Revision of multiplicative Karnataka, Maharashtra

formula is directly linked factors in Property Tax (provides it as an option
to guidance value Rules along with annual rental
value), Nagaland, Punjab
(only for MCs and self-
occupied properties but on
ground flat-rate system is
followed)
Tax value is prescribed The rules should clearly Gujarat (only MCs), Odisha,
basis some criteria, define the formula basis Tamil Nadu (provides CV as
one of the criteria is which property tax will an option), Uttar Pradesh and
guidance value be directly linked to the Uttarakhand (only for Coun-
guidance value with min. cils)
multiplicative factors
Valuation is basis ARV The State Act should be Assam, Punjab (only Councils;
but in case the ARV can- amended to allow for on ground flat rate system is
not be determined, ‘es- valuation basis market followed), Goa (only MCs),
timated market value’ is value as defined by the Haryana (only MCs), Tamil
considered/or ‘estimat- guidance value for ALL Nadu, Uttar Pradesh and Ut-
ed market value is used properties with minimum tarakhand(only MCs)
only in case of certain multiplicative factors
types of properties

37
 Existing Provision Reform Required States

Criteria used for ar- Rules should be amended Andhra Pradesh, Chhattis-
riving at the taxation to include guidance value garh, Gujarat (only Councils),
value is determined by as a criteria and formula Madhya Pradesh, Manipur,
the State/Property Tax basis which property tax Mizoram, West Bengal, Tri-
Board/Valuation Board will be directly linked to pura
or Committee basis rules the guidance value with
min. multiplicative factors

Criteria used for arriving State Act should be Bihar, Himachal Pradesh,
at the taxation value are amended Jharkhand, Kerala
fixed in the State Act
and does not mention
guidance value
Criteria used for arriving State Act should be Arunachal Pradesh, Goa (only
at the tax value are left amended Councils), Haryana (only
to the discretion of the Councils), Meghalaya, Rajas-
ULB/or not defined than, Sikkim
Source: Statutory provisions in State Acts as per the list provided in Annexure 2 below

for Recommendation 2
- Institutional mechanism for periodic rate revision

Step 1
Provide for periodic increase of property tax in line with increase in guidance
value
There should be a provision for periodic updation of property tax in line with increase
in guidance value. The provision should include the fixed period in which the property
tax will increase and the criteria that will be used for deciding extent of increase. Ideally,
for ease of administration, property tax should be increased by a fixed percentage for
a range of 3-5 years; besides updating guidance values used for property tax to reflect
latest guidance values published by the State, and consequent re-assessments.

Step 2
Make amendments to statutory provisions in Acts and/or Rules as required to
implement new system for periodic revision of property tax
Table 7 below provides summaries of existing statutory provisions as per State Acts and
actions required for periodic increase in line with increase in guidance value.

38
 A Toolkit for Property Tax Reforms

Table 7: Summary of enabling statutory provisions for periodic increase in property

tax
Existing Provision Reform Required States
Provision for periodic No reform required No State
increase in property
tax linked to increase in
guidance value
Provision mentions that Rules should clearly de- Bihar, Karnataka, Kera-
property tax valuation is fine that the increase in la, Odisha, Punjab (only
to be revised at a fixed property tax should be MCs),
percentage every fixed commensurate to increase
number of years in guidance value or fixed
percentage (whichever is
higher)
Provision for re-valuation to Rules should clearly Haryana (only MCs), Him-
be undertaken at fixed/peri- define that increase in achal Pradesh, Jharkhand,
odic intervals without men- property tax should be Maharashtra (only for
tion of process for re-valu- commensurate to increase ULBs that have adopted
ation will be undertaken or in guidance value CV method), Meghalaya,
whether it will be based on Sikkim, West Bengal
increase in guidance value
Provision for State/Property Rules should clearly Goa (only MCs), Hary-
Tax Board/Valuation Com- define that increase in ana(only Councils), Mani-
mittee or Board to decide property tax should pur, Mizoram
method for revision of be commensurate with
property tax will be under- increase in guidance value
taken, and at what interval
via rules
No provision for periodic Act should be amended Arunachal Pradesh,
increase in property tax/left to include provision Assam, Andhra Pradesh,
to the discretion of the ULB for periodic increase in Chhattisgarh, Goa (only
property tax linked to Councils), Gujarat, Mad-
guidance value hya Pradesh, Nagaland,
Punjab (only Councils),
Rajasthan, Tamil Nadu,
Telangana, Tripura, Uttar
Pradesh, Uttarakhand
Source: Statutory provisions in State Acts as per the list provided in Annexure 2 below

39
 05
ASSESSMEnT

40
 A Toolkit for Property Tax Reforms

KEy MESSAGES
Assessment can be undertaken by tax assessors through physical survey or by property
owners through self-assessment. Due to staffing deficits in ULBs and generally as a
better administrative mechanism, self-assessment method has been implemented by
several States. However, self-assessment system is still not fully automated and there
is no system for periodic scrutiny that gives way to discretionary powers and makes
the system susceptible to leakages. This can be overcome by an online self-assessment
system with a provision for random scrutiny. Broad-based exemptions without an
underlying rationale reduce the tax base and increase the tax burden on non-exempt
taxpayers. To discourage this, revenue foregone due to exemptions should be published
in city budgets. Dispute resolution mechanism should be re-designed to be timely and
effective and take into account costs and benefits.

WHAT ARE THE CuRREnT PRACTICES?

Assessment of properties refers to the exercise of assessing the value of a particular
property within the parameters defined by ULB or State for the purpose of taxation.
The rules and formulae for assigning value to all properties within the city are defined
by valuation. Assessment is the application of those rules and formulas to individual
properties. The strength of the assessment process can be judged by the completeness
and veracity of the assessment records.

The process of assessment has three aspects to it –

1. Assessment methodology used for assessing property tax payable by individual
properties
2. Exemptions as defined by statutory provisions
3. Dispute resolution mechanisms

The flowchart below provides the current landscape of assessment practices (some
good practices have been marked in green).

Ad-hoc at the discretion of

the ULB/tax assessor
Assessment conducted
by tax assessors Periodic as defined by the
Assessment statutory provisions of the
Methodology State Act/Rules
Self-Assessment conducted
by property owners/occupiers

Process of verification of Process for Process of verification of

self-assessment forms billing/reminders self-assessment forms

Billing/
Manual Random
Online No billing Reminders Ad-hoc
paper-based Scrutiny
via notice/SMS

41
 Property tax laws in India are generally seen to provide a number of
exemptions without well-defined criteria
Some examples of broad-based exemptions are: - in Jalandhar in Punjab, approximately
50% of the properties have been exempt from paying property tax. This is primarily
because of property size-based exemptions (all properties smaller than 125 square yards).
Mumbai recently introduced size-based exemptions of 500 square feet. In Chhattisgarh,
all self-occupied properties get 50% rebate. In Karnataka, all buildings or vacant lands
belonging to Development Authorities or any local authority are exempted.

Dispute resolution mechanism mostly relies on civil courts in majority of

the States
As per State Acts, either there is no mechanism in place for dispute resolution or there
are three institutional systems by which property tax assessment disputes are resolved –
(i) Civil courts, (ii) Assessment Tribunals (iii) Property Tax Boards. In most States where
the Act provides for an Assessment Tribunal or Property Tax Boards, both the Tribunal
and the Board are not effectively functional.

WHAT ARE THE KEy CHAllEnGES?

Manual system of assessment is cumbersome to administer and is
vulnerable to leakages that could could accompany a discretionary system
Prima facie, there are two fundamental problems with manual system of assessment.
Firstly, this system is highly discretionary and susceptible to leakages. It can also lead to
disputes between the taxpayer and the Municipality over the assessment value, further
encumbering Government resources with costly and time-consuming court cases.
Secondly, it is operationally cumbersome requiring significant human resources and
related coordination and management.

Self-Assessment scheme without a clear system for scrutiny and

verification does not provide complete and accurate assessment records
While a self-assessment scheme might reduce the burden on Government resources
and increase transparency to a large extent, there are a few challenges that need to be
addressed. The first concerns the methodology for scrutinizing of the self-assessment
forms. In Karnataka, for example, the assessment registers are not linked to the GIS-
based property database created as part of enumeration. Thus, there is no way of
verifying the information provided in the self-assessment forms other than physical
verification. Physical verification suffers from the familiar issues of discretion and
operational challenges. Moreover, lack of well-defined provisions for random checking of
assessment forms (similar to the method for scrutinizing income tax returns) has led to
ad-hoc checking, no regularization and therefore weaker compliance and enforcement.

42
 A Toolkit for Property Tax Reforms

Broad-based exemptions without a well-defined underlying rationale

reduce the tax base and widen the tax burden on non-exempt taxpayers
Property tax provisions in India are generally seen to provide a number of exemptions. A
tax system is considered good if it has a very broad base and a low rate3. Any limitation
in the base due to exemption and exclusion results in a higher tax burden on non-exempt
taxpayers. In the context of property tax, exemptions (a) create complexity in the tax
system, (b) encourage fraudulent behavior, and (c) increase administrative burden for
the local bodies.

The existing dispute-resolution mechanism is cumbersome, increases

administrative burden and reduces tax base
Dispute resolution mechanism in most States is dependent on civil courts. The other
mechanisms like Assessment Tribunals and Property Tax Boards or Valuation Committees
are largely ineffective. Part of the reason is that these mechanisms involve creation of
a State-level entity that consist of not just existing Government officials but private
sector experts or retired judges. In an already resource starved situation, it seems to
have become difficult for departments to create and sustain yet another institution or
institutional process. At the same time, large number of cases in the civil courts mean
untimely decisions, reduced tax base and administrative burden for the ULBs.

WHAT ARE THE RECoMMEnDATIonS?

Recommendation 1

An online Self-Assessment mechanism with a system for raising demand/sending

reminders and a process for random scrutiny of Self-Assessment forms.

Recommendation 2

Exemptions to property tax should be based on a rationale that is clearly defined in the
State Acts. Revenue foregone as a result of exemptions should be included in annual
budgets of Municipalities, so it is measured and reviewed for any further action.

Recommendation 3

The dispute redressal system for property tax should be systematic and timely. This
may require a new institutional design. Dispute redressal mechanism to be simplified
with involvement of Commissioner/Divisional or Regional Commissioners or District
Magistrates (depending on the State) or Director of Municipal Administration or
equivalent. Furthermore, there should be a provision for 50% of the property tax assessed
to be paid under protest, on the lines of central taxes.

3. OECD 2014
43
 PROPERTY
TAX

HoW To IMPlEMEnT THE RECoMMEnDATIonS?

for Recommendation 1
- Adoption of online Self-Assessment System

An online Self-Assessment mechanism with a system for raising demand/sending

reminders and a process for random scrutiny of Self-Assessment forms.

Step 1
Introduce statutory provisions in State Acts/Rules mandating random scrutiny
of fixed percentage of self-assessment forms

Introduce statutory provision that mandates random scrutiny or audit of assessment

forms. The provision should clearly define the process for such scrutiny, based on
risk-assessments of processes and internal controls, and using random sampling
methodology. Results of such random scrutiny should be published and appropriate
action taken based on the same, both with respect to individual instances of deviations
as well as with respect to processes and internal controls.

44
 A Toolkit for Property Tax Reforms

Step 2
Integrate assessment database with property records of other utilities for
automatic verification of property attributes and assessment records

Administratively, seamless integration of assessment databases with the property

registers and the databases of other utilities would ensure automatic verification of all
assessment records against existing records of properties (in fact they should all be
linked to/be part of a single property register). An illustrative process flow is presented
below.

The Any changes A request for

Taxpayer from existing verification of
assessment
submits records are the documents
details are
self-assessment flagged and is also flagged
automatically
form online require the in the system
verified
against taxpayer to wherein the
existing submit concerned
property supporting authority has
records documents (e.g. stipulated time
lease deed) for verifying
before taxpayer and
can proceed to consequently
the payment amending the
window records

45
 06
BIllInG AnD
CollECTIon

46
 A Toolkit for Property Tax Reforms

KEy MESSAGES
Billing and collection is one stage of the property tax lifecycle that has received the most
attention from both policy makers and administrators, however, progress of reforms
could be accelerated through technology and process innovations. A combination
of staffing deficits, incomplete property registers and poorly designed processes are
the major cause of low collection efficiencies. Technological interventions like digital
integrated billing, digital payments and creation of a dedicated cadre of collectors for
all taxes, user charges, and fees can transform the billing and collection process and lead
to immediate results. This should be backed by well-defined and strong penal provisions
that strengthen the hands of administrators.

WHAT ARE THE CuRREnT PRACTICES?

The primary task at this stage of the property tax lifecycle is to ensure that all the
properties that have been assessed are billed and tax is collected in a timely manner.
The method of billing and collection should be transparent. It should also be easy to
administer and comply with. The current landscape of billing and collection practices
is illustrated in the flowchart below (some good practices have been marked in green).

Bills are electronically generated

and taxpayers are notified via
email/text message
Demand register is created by the /door-to-door bill distribution
ULB as per the assessment record

Billing Bills are manually created and

are distributed door-to-door
Demand is not generated to taxpayers
under self-assessment scheme

Tax is collected
through
cash/cheque/deman
d draft at the Return slip (with Tax receipt is
collection centers return ID) is generated/created
operated by the ULB generated/create and provided to
Maintenance or through
of Property d and is recorded the taxpayer as
door-to-door in the collection proof of payment
Tax register collections register

Tax is collected
online (or through
both online and
offline channels)
through digital
payments

47
 WHAT ARE THE KEy CHAllEnGES?
Collection efficiency only measures the ability of the ULB to collect tax
from those properties that have been assessed and billed. It does not
account for properties that have not been assessed but are taxable
Collection efficiency of property tax ranged from 32% to 72% for five States for which
data was available from CAG audit reports for the period from 2011-12 to 2015-16. While
in Karnataka, Madhya Pradesh and West Bengal, collection efficiency was 65-70%, in
Himachal Pradesh it was 52% in 2013-14, the only year for which data was available, and
32% in Jharkhand from 2011-12 to 2015-16.

To put this data into perspective, it is important to first understand the term collection
efficiency and its implications.

Tax Collection Efficiency = Tax collected/Demand raised

The denominator in the above equation has profound implications. As mentioned

in Chapter 1 on Enumeration, in the absence of updated and complete property tax
registers, it is impossible to know the accurate number of properties in any city. Demand
cannot be raised from properties which do not exist in the register to begin with. Thus,
collection efficiency only measures the ability of the ULB to collect tax from those
properties which have been assessed and exist in the property tax register. It does not
measure the tax potential of the city. This is being cited here as a challenge to re-
emphasise that a singular focus on collection efficiency alone will not suffice.

Collection efficiency is correlated to administrative efficiencies and staff

strength
Collection efficiency is dependent on the completeness of billing and administrative
efficiencies in the collection process. In many ULBs, there is no process in place to ensure
completeness of billing, timely billing and issuance of reminders for payment. Several
ULBs continue to maintain manual records that are vulnerable to errors. In certain cases
significant staff vacancies in revenue departments directly impact collection efficiencies,
besides reallocation of revenue staff for other duties. In some cities that have an online
system for billing and collection, the online systems have been built by an external
agency. The transfer of knowledge and requisite capacity building has lacked serious
attention. Adoption of online payment of property tax has been relatively slow. The
adoption rates vary across cities. They have been high for some cities like Pune (more
than 55% of the collections are done digitally) and low in cities like Raipur (both cities
with relatively stronger property tax systems, in other cities it is likely to be far lower).

48
 A Toolkit for Property Tax Reforms

Weak penal provisions impact compliance and affect collection efficiencies

From a policy standpoint, penal provisions too have been weak, with several State Acts
not even making a reference to them.

WHAT ARE THE RECoMMEnDATIonS?

Recommendation 1
Digital Billing and online system for collection

The most obvious solution to the problem of lack of transparency is creation of an online
system for billing and collection. Andhra Pradesh has been fairly successful in building
a centrally run online portal for billing and collection (Refer to Box 1 above). An online
system should ensure that all bills are distributed electronically to property owners and
automatic periodic reminders are sent via SMS.

Recommendation 2
Technological Interventions

Technology can radically transform collections in the immediate term. Combining the
below interventions can transform the current collection process -
• A digital property tax register with integrated billing for taxes and other utility
charges such as water, sanitation and electricity charges, and even trade licence fees
• Digital payments (mobile + internet + handheld point of sale devices) and
• A dedicated cadre of tax collectors (like Uber, Swiggy), including outsourcing of
collections,may be considered as appropriate, with incentives based on incremental
collections and coverage

The success story of Ranchi Municipal Corporation (summarized in Box 4 below),

where there was a fourfold increase in collections between FY 14-15 and FY 17-18 post
outsourcing of collection, merits serious evaluation for adoption. Several cities like
Ludhiana and Amritsar have tackled the issue of staff deficit by outsourcing collection
centres. They have created Citizen Facility Centers (CFC) in zonal offices responsible
for filling the assessment forms of all walk-in taxpayers and collecting taxes through
cash, online and digital channels. Some States like Odisha have experimented with use
of hand-held Mobile Point of Sale (MPOS) devices to build transparency in the collection
process and boost digital payments. Box 5 below, illustrates the case of Odisha.

49
 Box 4: optimization of Tax Collection- The Case of outsourcing
in Ranchi nagar nigam

Pre-Project Situation

Staffing in Ranchi Nagar Nigam had not kept pace with the growth in number
of properties in the city. This directly impacted property tax collections that
remained stagnant at Rs 5 to 6 crores from 2010 to 2013 even as the city grew
rapidly. The collection efficiency fluctuated between 15%-24% which was below
average when compared to other cities in India.

Project Details

In 2014, Ranchi Nagar Nigam entered into an agreement with a private agency for
providing managed services for collection of property tax from properties within
the jurisdiction of the ULB. An agency was selected through a tender process and
entrusted with the enumeration of properties, assessment of new properties, and
billing and collection of property tax. The private agency deployed a team of over
148 personnel, including supervisors and managerial staff, across 55 wards in the
city. These areas were earlier serviced by only 22 tax collectors.

Results

These steps significantly enhanced the coverage of properties. Number of

properties per tax collector dropped from 4,273 to around 873 on average, owing
to number of personnel deployed by the agency. This enabled better coverage
and follow up. Within 3 years, property tax collection in Ranchi increased more
than fourfold from Rs 9 crores in 2014 to Rs 43 crores in 2017. The assessment
base of properties under the tax net rose from 96,000 properties to 1.6 lakh
properties, a growth of 67 per cent. Better coverage and professional supervision
resulted in a significant jump (CAGR of 27% in 8 years) in the revenue collections
for Ranchi Nagar Nigam.

Box 5: Easing Property Tax Collection process using Hand-Held

Mobile Point of Sale devices in odisha (Work initiated and in
progress)

Pre-Project Situation

Collections were largely done via Cash/Cheque payments through door-to-door

or in-office collections. High cash handling charges and issues of cash rotation
were prevalent. ULBs did not offer multiple modes of digital payments.

50
 A Toolkit for Property Tax Reforms

Project Details

In Feb’20, MPOS devices were deployed in 9 AMRUT cities. Procurement of

devices was supported by partner banks. An integrated payment solution with
a tailor-made app pre-configured on MPOS device was deployed. This solution
enables a universal payment platform for payment acceptance that allows for
payment through debit/credit cards, UPI, Bharat QR and remote or SMS pay,
cash and cheque. It’s an integrated solution with data-pull from existing digital
property database at server level and allows for real-time data posting and
auto-reconciliation. MPOS devices also come in a configuration that supports a
printable receipt.

Results

This solution enhanced agent efficiency by removing person-hours required

for manual input of collection data (2 hours per person per day). It led to cost
optimization as no workforce was required for MIS generation and manual account
reconciliation. A two month pilot with MPOS led to 43% of total transactions
happening through digital mode. 500 MPOS devices have been deployed in 30
ULBs till date with a plan to scale them to all ULBs. The State was also able
to empower Self-Help Groups by training and engaging them in property tax
collections.

Recommendation 3
Strengthen Penal Provisions

State Acts require stronger penal provisions for defaulters. These provisions will
strengthen the hands of the revenue officials in ensuring compliance. Defaulters’ list
should be published and disseminated. International examples have also shown
that vigorous emphasis on improving administrative processes leads to an uptake in
collections. Philippines represents a case study for this. In the case of Quezon City, the
strategy of facilitated collection and strict enforcement, accompanied by improved
taxpayer service, substantially improved revenue yield.

Early bird discounts and late payment penalties have also shown positive results in Pune
and Hyderabad. They have increased the frequency of the cash-flow which otherwise
used to hit its peak in the last quarter of the financial year.

51
 HoW To IMPlEMEnT THE RECoMMEnDATIonS?

Recommendation 2
Technological Interventions

Step 1
Creation of single digital property register
The creation of a single digital property register that integrates all Municipal databases
and eventually integrates Municipal databases with State stamp duties and registration
records is the backbone. The process for this has been described in the Chapter on
Enumeration.

Step 2
Integrated digital billing for all taxes, fees and user charges
As each household or commercial property is liable not just for property tax but also
a variety of user charges such as water, sewerage, trade licence fees etc., it could
prove efficient and more citizen-friendly to undertake integrated billing and collection.
ULBs and other agencies will not have to duplicate efforts, citizens will have a single
relationship from the Government side to liaise with and may also potentially encourage
better compliance.

Step 3
Increase channels and modes of payments
Payment of property tax has to be made as easy and smooth as possible for citizens.
Therefore, multiple channels should be made available ranging from cash, cheque,
demand draft, internet banking and mobile payment. Similarly, payment should be
facilitated in ward offices, other citizen service centres, bank branches and also through
MPOS (for door to door collections) and through all feasible modes referred to above.

52
 A Toolkit for Property Tax Reforms

Step 4
De-link the functions of assessment and billing and collections
There is a strong case to delink assessment and billing and collections both from the
perspective of internal controls (segregation of duties) but also from the perspective of
outsourcing and specialisation. A unified cadre of collectors who focus on collections
from specific categories of properties (residential, commercial, high value), or
different categories of taxpayers (defaulters, and within that hard, soft buckets etc.)
or geographies (by ward, by ULB) and who are enabled by MPOS with a map and
timetabling can deliver transformative results in collections (adapting Uber, Swiggy
models to collection function) and also drive operational efficiencies within ULBs at a
broader level. Given below is a diagrammatic representation of the process flow for
technological interventions that the States and cities can undertake for improving billing
and collection.

UNIFIED GIS+ INTEGRATED BILLING DATABASE+ DIGITAL PAYMENTS+ DEDICATED CADRE OF COLLECTORS+MPOS= TRANSFORMATION

Unified Bundling of
GIS Database Integrated Bill Creating more channels and modes of payment
all collections
Propoerty Tax Door-to-door Cash/card/
mobile Cheque/DD/Cash/ Citizen facilitation
Water Tax collections payments card/mobile payments centre
Sanitation Tax Cheque/DD
Bank Branches Cheque/DD/Cash/ ULB
Other taxes, fees /Cash/card/ card/mobile payments
mobile payments zonal office
and user charges

Property owner
Selects the receives the physical
Collector visits Selects the Selects Selects the Selects Collects
mode of payment receipt and
the property word no. the taxes period of the reason payment
payment a digital receipt on
with a hand held and and payment for non and
(cash/card/ their registered
MPOS/Collect or property charges (quarterly/ payment generate
cheque/mo- mobile no.
at the collection no. due to be annual) receipt
point paid bile/pay-
ment) Payment data flows
into the ULB
database and MIS
can be generated for
tracking daily
collections

53
 07
REPoRTInG

54
 A Toolkit for Property Tax Reforms

KEy MESSAGES
In most States where a digital property register exists, there is a system for MIS reporting. However,
the MIS has not been integrated with decision making and performance management. An MIS
system that is used for periodic reviews of tax official performance and publishing of demand and
collection data especially defaulters’ data in the public domain can boost collection efficiency,
bring transparency in the assessment and collection process and motivate tax officials.

WHAT ARE THE CuRREnT PRACTICES?

While a MIS exists in all ULBs that have an online property register integrated with payment
channels, it has generally not been integrated with decision-making for improving coverage
and collections. There are very few examples (if any) of States in which MIS systems are used
by different levels of Municipal and State authorities for decision-making and/or performance
management. Property tax collection and pendency data is not available in public domain in
majority of the ULBs.

MIS system is used for decision

making and performance
Online tax system that generates management
MIS reports

Reporting
Manual tax system with
no provision for MIS MIS system is not used for
decision making and/or
performance management

WHAT ARE THE RECoMMEnDATIonS?

Recommendation 1
- Creation of a MIS System

Data-driven decision making and performance management are essential for a robust property
tax system. Quarterly reviews of property tax MIS at city/ward/revenue official level should be
institutionalised.

Recommendation 2
- Ranking of Revenue officials

Ranking of revenue officials based on the above MIS would create healthy competition, motivate
revenue officials through rewards and recognition and foster adoption of best practices. Recently,
the State of Odisha conducted a competition, ‘Municipal Premier League’ (MPL) among tax
officials of 9 AMRUT cities in the last quarter of FY 19- 20. It measured the performance of the tax
officials on parameters like collection efficiency, arrear collections, new and re-assessments and
digital payments. MPL was a success in motivating tax officials and improved revenues by 7% in
the State in less than two months.

Recommendation 3
- Publishing data in public forum

Publishing ward-wise demand and collection data, especially defaulters’ data, in public domain
can help in building transparency and accountability.

55
 08 AnnExuRES

AnnExuRE 1: lIST of REPoRTS foR REfEREnCE/ADDITIonAl

READInG
1. Finance Commission of India (2009). Report of the Thirteenth Finance Commission.
New Delhi: Finance Commission of India.
2. Finance Commission of India (2015). Report of the Fourteenth Finance Commission.
New Delhi: Finance Commission of India.
3. Second Administrative Reforms Commission (2007). Local Governance – An
Inspiring Journey into the Future. New Delhi: Department of Administrative Reforms
and Public Grievances.
4. High Powered Expert Committee for Estimating the Investment Requirements for
Urban Infrastructure Services (2011). Report on Indian Urban Infrastructure and
Services. New Delhi: Ministry of Urban Development.
5. Collier, P., Glaeser, E. Venables, T., Blake, M., Manwaring, P. (2018). Land and Property
Taxes for Municipal Finance. International Growth Centre.
6. Mohanty, P., Mishra, B., Goyal, R. and Jeromi, P. (2007). Municipal Finance in India:
An Assessment. Delhi: Department of Economic Analysis and Policy, Reserve Bank
of India.
7. Govt. of Punjab: Revenue, Rehabilitation & Disaster Management Department,
Stamp and Registration Branch (2017). Government Notification No. 24/55/2017-ST-
2/23067. Chandigarh: Govt. of Punjab.
8. Karnataka Municipal Corporation Act, 1976 (as modified up to 2001).
9. Kolkata Municipal Corporation (2017). Base Unit Area Value and Multiplicative
Factors. Kolkata: Kolkata Municipal Corporation.
10. Maharashtra Municipal Corporation Act, 1949 (modified up to 2014, including
amendment of 2015).
11. Nath, S. (1987). Is Residential Property Tax Equitable? A Case Study of Calcutta.
Economic and Political Weekly, 22(29).
12. OECD (2014). Addressing the tax challenges of the digital economy. Paris: OECD
Publishing.
13. Lall, S., Deichmann, U. (2006). Fiscal and Distributional Implications for Property Tax
Reforms in Indian Cities. New Delhi: NIPFP.
14. Madon, S., Sahay, S., Sahay, J. (2004). Implementing Property Tax Reforms in
Bangalore: An Actor-Network Perspective. New Delhi: Elsevier.
15. Mohanty, P. (2003). Reforming Property Tax: The Approach of Municipal Corporation
of Hyderabad. New Delhi: Centre for Good Governance.
16. Rao, G. (2013). Property Tax System in India: Problems and Prospects of Reform.
New Delhi: NIPFP.

56
 A Toolkit for Property Tax Reforms

17. Rao, P., Rao, D. (2015). Property Tax Reforms in Andhra Pradesh and Telengana. New
Delhi: Centre for Good Governance.
18. Bandyopadhyay, S. (2013).Property Tax Reforms in India: A Comparison of Delhi and
Bangalore. New Delhi: NIPFP.

AnnExuRE 2:lIST of STATE ACTS THAT WERE REfERRED foR THE

ToolKIT
1. Andhra Pradesh Municipalities Act, 1965 (as modified up to 2014)
2. Andhra Pradesh Municipal Corporation Act, 1994 (as modified up to 2014)
3. Arunachal Pradesh Municipal Act, 2007
4. Delhi Municipal Corporation Act, 1957 (including amendment of 2003 and 2011)
5. Gauhati Municipal Corporation Act, 1969 (as modified up to 2012)
6. Greater Hyderabad Municipal Corporation Act, 1955 (as modified up to 2014)
7. Bihar Municipal Bill, 2007 (including amendments of 2009, 2011, 2013)
8. The Punjab Municipal Corporation (Extension to Chandigarh) Act, 1994
9. Chhattisgarh Municipalities Act, 1961 (including amendments till 2012)
10. Chhattisgarh Municipal Corporation Act, 1956 (including amendment of 2003, 2004)
11. Goa Municipalities Act, 1968 (as modified up to 2010)
12. The Goa, City of Panaji Corporation Act, 2002 (as modified up to 2006)
13. Gujarat Municipalities Act, 1963 (as modified up to 2006)
14. Gujarat Municipal Corporation Act – (Bombay Provincial Municipal Corporation Act,
1949) (as modified up to 2006)
15. Haryana Municipal Corporation Act, 1994 (as modified up to 2013)
16. Haryana Municipal Act, 1973 (as modified up to 2003)
17. Himachal Pradesh Municipal Act, 1994 (as modified up to 2007)
18. Himachal Pradesh Municipal Corporation Act, 1994 (as modified up to 2008)
19. Jammu & Kashmir Municipal Act, 2000 (including amendment of 2010)
20. Jammu & Kashmir Municipal Corporation Act, 2000 (as modified up to 2010)
21. Jharkhand Municipal Act, 2011 (including amendment of 2016)
22. Karnataka Municipalities Act, 1961 (as modified up to 2005)
23. Karnataka Municipal Corporation Act, 1976 (as modified up to 2001)
24. Kerala Municipality Act, 1994 (including amendments of 1996, 2003, 2005, 2007,
2012 and 2013)
25. Madhya Pradesh Municipal Corporation Act, 1956 (including amendment of 2011)
26. Madhya Pradesh Municipalities Act, 1961 (including amendment of 2011)
27. Maharashtra Municipal Corporation Act, 1949 (as modified up to 2014, and including
amendment of 2015)
28. Maharashtra Municipal Councils, Nagar Panchayats & Industrial Townships Act, 1965
(as modified up to 2013)
29. Manipur Municipalities Act, 1994 (as modified up to 2012)
30. Meghalaya Municipal Act, 1973
31. Mizoram Municipalities Act, 2007 (as modified up to 2014)
32. Nagaland Municipal Act, 2001
33. Odisha Municipal Corporation Act, 2003 (including amendment of 2015)
34. Odisha Municipal Act, 1950 (including amendment of 2015)
57
 35. Punjab Municipal Act, 1911 (as modified up to 2003)
36. The Punjab Municipal Corporation Act, 1976 (as modified up to 2017)
37. Rajasthan Municipalities Act, 1911 (as modified up to 2003)
38. Sikkim Municipalities Act, 2007
39. Tamil Nadu - Chennai City Municipal Corporation Act, 1919 (Coimbatore is same -
extends to other 9 corporations) (including amendment of 2011 and 2012)
40. Tamil Nadu District Municipalities Act, 1920 (including amendment of 2011 and 2012)
41. Telangana Municipal Act, 2019
42. Tripura Municipal Act, 1994 (as modified up to 2016)
43. Uttar Pradesh Municipalities Act, 1917
44. Uttar Pradesh Municipal Corporation Act, 1960 (as modified up to 2008)
45. Uttarakhand Municipalities Act, 1916
46. Uttarakhand Municipal Corporation Act, 1960 (as modified up to 2008)
47. West Bengal Municipal Corporation Act, 2006
48. West Bengal Municipal Act, 1993 (as modified up to 2015)

AnnExuRE 3:lIST of CITIES STuDIED foR THE ToolKIT

Popln Cat # cities List of cities
4M + 2 Bengaluru (Karnataka)
Hyderabad (Telangana)
1M – 4M 5 Raipur (Chhattisgarh)
Ranchi (Jharkhand)
Pune (Maharashtra)
Ludhiana & Amritsar (Punjab)
500K – 1M 4 Bhubaneswar & Cuttack (Odisha)
Jalandhar & Sahibzada Ajit Singh Nagar
i.e. Mohali (Punjab)
100K – 500K 8 Badlapur & Khopoli (Maharashtra)
Berhampur, Sambalpur, Puri & Bhadrak
(Odisha)
Patiala & Khanna (Punjab)
<100K 1 Paradip (Odisha)

58
A Toolkit for Property Tax Reforms

59
60