The Maharashtra cabinet on January 12 approved the state government’s decision to waive property tax on houses upto 500 sq ft in Mumbai.
On January 1, the Maharashtra government decided to completely waive property tax on residential units of up to 500 sq ft located within the Mumbai municipal area limits.
Loss of Revenue
The waiver will result in a revenue loss of Rs 462 crore for the exchequer.
The Mumbai municipal corporation will bear a loss of Rs 417 crore while the state government will shoulder the remaining Rs 45 crore deficit.
It will benefit 16.14 lakh residential units, the Chief Minister’s Office said in a statement.
Waive Tax on school buses
The cabinet on Wednesday also decided to waive the tax on school buses for the period between April 2020 — the start of the coronavirus pandemic — to March 31, 2022.
Vehicles owned or hired on contract by schools and used only for transporting school children will be eligible for the concession, the CMO statement said.
The tax already paid would be adjusted in future dues.
Why has the decision been taken now?
With an eye on the 2017 Brihanmumbai Municipal Corporation (BMC) polls, the Shiv Sena had promised that it will completely waive off the property tax of residential properties up to 500 sq ft.
Following the 2017 elections, the then state government gave its go-ahead to the Shiv Sena ruled BMC to waive off only the general tax component of the property tax in 2019 which led to a lot of criticism on the Shiv Sena.
The property tax comprises eight components, including general tax, water tax, sewerage tax, education cess, tree cess and water benefit tax among others. The general tax constitutes around 10 per cent to 30 per cent of the total amount.
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