Self Assessment Scheme

Dear citizen,

The Bruhat Bengaluru Mahanagara Palike (BBMP) is happy to offer to its citizens a new millenium gift, namely, Self-Assessment System of Property Tax. It is however optional. The council took this historic decision vide its Resolution No. 194/99-2000 dated 13.3.2000 and comes into effect from 1.4.2000.

The method of assessment of property tax is provided under section 109 of Karnataka Municipal Corporation Act, 1976. The property is assessed to tax based on its Annual Rateable Value (ARV). As per section 109(2) ARV of a property is the gross annual rent at which the building or land may reasonably be expected to let from month to month or from year to year. Section 109(2)(a)(ii) provides the method for assessing property tax when in the opinion of the Commissioner, the gross annual rent cannot be estimated. Though the property tax is being assessed u/s 109(2), the Corporation has so far not issued any guidelines to its Assessing officers for the purpose of determining the annual rent. This has resulted in official discretion, which has not always been fair, different rates for similar buildings, citizen dissatisfaction and leakage of revenue to the Corporation. Obviously, this system has benefited neither the citizen nor the Corporation.

Under Sec. 148 of the KMC Act, 1976, the Corporation is empowered to revise the property tax atleast once in five years, the reason for which is obvious. It is a trade off between the higher cost of annual reassessment and the gradual increase in revenue from the base year to meet the growing needs of the Corporation. While adopting the self-assessment scheme, the council has simultaneously passed a resolution vide no. 388/99-2000, dated 13.3.2000, to take up general revision of all the residential properties since the same had not been done since 1972. The general revision of non residential units is already underway as a sequel to council Resolution in the year 1999. In the absence of any fair and objective guidelines for assessment of property tax, general revision is likely to cause avoidable harassment. Hence, the need for a revised system of assessment and one that is based on fair and rational parameters and is simultaneously citizen friendly.

In the circumstances explained supra, the norms of assessment have now been evolved keeping in mind the observations of the Hon'ble Supreme Court while examining issues relating to property tax. These are

i) The area and properties should be classified into categories according to certain norms

ii) The Classification should be simple and not cumbersome.

iii) There should be an application of mind.

The new scheme has been evolved on the mass appraisal system of properties. The city of Bengaluru has been classified into six zones based on the property valuation done by the department of Revenue (Registration). Further, the properties have been classified based on cost of construction value at current market rate. The per sq.ft per month rates applicable are related to the zone and class of building. While rates for rented buildings have been fixed at much lower than prevailing market rates, owner occupied buildings have been given a further concession of 50%. However, we recognize that there are certain classes of non-residential properties whose value is not related to the zone. Hence, a separate scheme of classification has been evolved for such properties.

We are pleased to inform the Bengaluru that the rates for different classes/zones have been arrived at after carefully factoring several criteria like the location, type of construction, built up area, use of property and the age of the building.

The guidelines for self-assessment included in this book are simple, and therefore, easy to understand by the citizens. The Citizens are hence requested to go through the annexures, notes, general conditions and examples and assess their property tax honestly and file the same by 29th of May each year. As a further step towards people friendliness a citizens has been given a range of choice of file his statement of property tax at any of the branches of Vijaya Bank and Syndicate Bank besides at the offices of the concerned Asst. Revenue Officer.

While our primary concern has been to introduce objectivity, transparency and simplicity in property tax assessment as a response to a large number of complaints of discrimination, questionable intention and harassment, we simultaneously trust that the citizens will keep in mind the financial needs of the Corporation and become honest tax payers.

Let us both together start off the new millennium with a new vision and mission of making Bengaluru one of the loveliest places to live in.

(SRI. K.JAIRAJ)                                                                    (SRI. M.RAMCHANDRAPPA.)

COMMISSIONER                                                                      MAYOR

DATE :13.3.2000

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The following section contains six annexures, two notes, a set of general conditions and a few examples as shown below.

ANNEXURE-I: The contains various rates per sq. foot per month that the property owner has to adopt for arriving at Annual Ratable Value (ARV) of the residential properties. The table has six zones from A to F (Column-5) and five property classifications from category I to V (column-I). The rates per sft. Per month applicable for arriving at the Annual Ratable Value are shown under against different zone/category for rented and owner occupied properties differently.

NOTE-I is attached to and follows immediately at Annexure-I. It contains useful definitions and the method of calculating the property tax on residential constructed properties as also on the excess vacant land.

ANNEXURE-II: This contains the details of rates for arriving at the Annual Rateable Value (ARV) for non-residential buildings. All the non-residential buildings have been classified into group A and B.

Group 'A' consists of six categories (VI to XI) of buildings and the per sft. Rate is based on the zone in which the property is located. As in the case of Annexure-I, here too, rates applicable per sft. Per month for respective zones and class of building have been shown separately for rental and owner occupied buildings.

Group B consists of non-residential buildings categorized into five categories (XII to XVI) and the per square foot rate for these properties is not related to zonal classification, since the value of the type of non-residential properties included in this group is not related to the zone in which they are located. Hence, for 5 types of properties categorized as class XII to XVI, an independent system of assessment unrelated to the zone, but based on certain norms has been evolved. Annexure-II, Group-B contains per sq.ft/per month rate applicable to calculate the ARV.

NOTE-2: is attached to and follows Annexure-II. It contains certain definitions and the method of calculating the property tax for the constructed portion as well as the excess vacant land.

ANNEXURE-III It contains the rates of depreciation allowed on buildings according to the age. These rates are applicable to all the 16 classes of properties.

ANNEXURE-IV This is a classification of all the cinema halls in the city irrespective of the zones. The Cinema hall owner is to assess his property tax at rates applicable under class-XIII of Group B, Annexure-II based on the category in which the cinema hall is located as shown in Annexure-IV.

ANNEXURE-V: This Annexure contains the zonal classification of all the residential properties in Bengaluru City. There are six zones, namely A,B,C,D,E and F. The citizen is advised to identify the category in which his property is located and then apply the specific rate applicable as indicated for that category vide classes I to V. Annexure-I, Please note that in an event if any Road / Street has been left out in any of the zones, the rate of the adjoining Street or area shall be taken for arriving at the Annual Rateable Value.

ANNEXURE-VI. Contains zonal classification of non-residential properties of the city. As seen therein there are six zones classified as A,B,C,D,E and F. The citizen is advised to refer to this annexure to identify the zone in which his property is located and refer to annexure-II, Group A and pick the rate applicable for assessment. Please note that in an event if any Road/Street has been left out in any of the Zones, the rate of the adjoining street or area shall be taken for arriving at the Annual Rateable Value.

As regards those properties which fall under Group-B, Annexure-II, it is reiterated that the zonal classification will not be applicable.

NOTE-2.: A set of general conditions numbered as 1 to 10 can be seen at page no. 7. These apply to both residential and non-residential properties and are in the nature of guidelines to the citizens assessing their own property tax as well as the corporation which collects the property tax. The citizens shall continue to enjoy the provisions of appeal, revision etc., within the provisions of KMC Act, 1976 as now.

EXAMPLES : A few specific examples have been shown to guide the citizens to assess the property tax in different zones for both Residential, Non-residential and Mixed Use properties.

The citizens may also see the examples where the lower and upper end limitations have been applied as per the General Condition Number 3.