Taking a cue from neighbouring Noida, the Revenue Department is mulling to introduce circle rate on such properties where tenure of rent agreement is more than one year. A proposal to this effect will be the part of the new circle rate of the property.
According to sources, 2 per cent-5 per cent circle rate on rented properties is expected in the national Capital. The new circle rate of property is expected to be implemented any time after May 16. This method is expected to generate sizable revenue for the city Government as it has been eying on properties with bigger values to ask for taxes in the form of circle rates. This will be the first ever move by the Government to fill its coffer. The move is also aimed at realising circle rate of property where the exact rent amount is hidden by the defaulters. The application of circle rate on rented properties is expected to generate revenue, especially from commercial and institutional areas. The new circle rate of properties is all set to be implemented any time after May 16. The circle rates are indicative price levels below which rate properties cannot be bought or sold in respective circles or areas.
Top sources told The Pioneer, that Revenue Department has moved a proposal to bring rented properties under the ambit of circle rates and it is expected between 2 per cent and 5 per cent of the circle rate depending on the areas. “The Revenue Department has set its eyes to generate revenue from the rented property. This means that those who have rented their property and having rent agreement deed executed by the court/or sub-divisional magistrate, will have to pay circle rate on their rent. If rent agreement is for one year or more than one year, the tenant will have to pay circle rate. The rate will depend on the areas falling under the category of the colonies. For instance, areas falling under category A colonies (posh colonies) will have to pay more as compared to the colonies falling in category H,” informed sources. The final rate will be decided by the lieutenant-Governor Najeeb Jung. The Revenue Department has focused on agricultural land and rented properties to bring under the ambit of the new circle rate of properties. “The Revenue Department got an idea from neighbouring Noida, which is charging circle rate on rented properties,” said the sources. In Noida, the circle rate on rented property is two per cent depending on the category of the sector.
It is learnt that if the proposal is accepted, over 10-15 lakh rented properties with higher market value will be brought under the scope of circle rate, which help to generate more revenue in the current fiscal year. According to Divisional Commissioner (Revenue) Dharampal, the proposal to implement new circle rates of properties will be forwarded to finance department within a day or two. “The new circle rates of property will be implemented any time after May 16,” he said.
The last circle rate revision happened in 2012 when the minimum rates for valuation of land and immovable properties were increased substantially. The current rates are: Rs 6.45 lakh per sq. metre in A category colonies like Vasant Vihar, Jor Bagh, Golf links, Anand Niketan, Friends Colony and Maharani Bagh. For B category colonies like Greater Kailash and Defence Colony, the rate is Rs 2.05 lakh per square metre. It is felt that these rates are much lower than the actual market rates prevailing in these areas. The circle rates for C category colonies is Rs 1,33,200 per sq. metre, Rs 1,06,400
(D category), Rs 58,400 (E category), Rs 47,200 (F category), Rs 38,500 (G category) and Rs 19,400 for H category. For the Revenue Department, enhancing revenue generation is critical in the current year due to the slump in collections is attributed to the market slowdown and fewer property registrations. Also, the Government had pinned its hopes on enforcing an e-court fee order which has been stayed by the High Court and that has impacted revenue collections.