J&K Administration Empowered to Impose Property Taxes

The Ministry of Home Affairs empowered J&K administration to impose property taxes for the first time recently by issuing several amendments in the Jammu and Kashmir Municipal Act, 2000 and Jammu and Kashmir Municipal Corporation Act, 2000 carried through the Jammu and Kashmir Reorganization (Adaptation of State Laws) Order, 2020.

For this the Ministry of Home affairs of Government of India substituted Sections 72 to 80 and now Section 72 states in the previous Acts of 2000: “Unless exempted under this Act or any other law for the time being in force, Property Tax shall be levied on all lands and buildings or vacant lands or both situated within the municipal area... The property tax shall be levied at such percentage not exceeding 15% of the taxable annual value of land and building or vacant land or both as the Government may, by notification, from time to time specify.”

What's new in this order ?

The former State of J&K had provisions to impose property tax in the laws enacted by the then Legislature but now every owner or occupier, who is liable to pay property tax, shall every year submit to the Executive Officer or any officer authorized by him in this behalf a return in the prescribed form within the stipulated period and in the prescribed manner."

Now property taxes will be imposed in Jammu and Kashmir through the municipal corporations, municipal councils and municipal committees in the Union Territory.

What's constitutional scheme on property tax ?

Under the scheme of our Constitution, property tax is leviable by the State Government or a local authority under Entry 49 - "Taxes on lands and buildings" of List II of Schedule VII to the Constitution of India, whereas tax on income is leviable by the Central Government under Entry 82 - "Taxes on income other than agricultural income" of List I of Schedule VII to the Constitution.

Finance commision and focus on property tax board in states :

The 15th Finance Commission recently held meeting with the Ministry of Panchayati Raj and discussed constitution of a property tax board by states among other matters.

The ministry submitted that the Commission may consider to keep its award to the PRIs (Panchayati Raj Institutions) for the revised period 2021-26 at Rs 10 lakh crore, an official statement said.

The meeting was held for forming up Commission's recommendations for the years 2020-21 to 2025-26.