Internal Revenue Collection (Own Source Revenue)

The power to levy and collect revenues is contained in the Act, 2009. The revenues are collected in the form of taxes, rates, and fees whose amounts are established in their respective model tax schedules.

  • • Taxes and rates (collectively known as the holding tax)
  • • This levy applicable to all properties (domestic, commercial, industrial, and institutional) is a major source of municipal revenue and is composed of
  • - Land and Buildings Assessment (property tax with a ceiling of 7 percent on the balance of the annual rental value)
  • - Lighting Rate (street lighting, rate sets a maximum of 3 percent)
  • - Conservancy Rate (a rate for provision of solid waste collection and disposal services, also with a ceiling of 7 percent)

Service Elements of Holding Tax

These are charged for all properties in areas where each service is provided, irrespective of whether or not the individual properly owner avails himself of the service, including

  • • The Fixed Property Transfer Tax (levied by the central government, 2 percent of the declared properly value is remitted to the city corporation)
  • • The Octroi Compensation Grant (grant from central government to compensate municipalities for the abolition in 1985 of their powers to levy import and export taxes transmitting their territories)
  • • The Trades and Profession License Tax (an annual fixed amount paid by tradesmen and professionals as a license fee to conduct their business activities)
  • • An Entertainment Tax (10-15 percent of the entrance ticket value for cinemas, theaters, exhibitions and so on)
  • • Rickshaw License (an annual fee)
  • • Income from Residential, Market and Other Properties (from advance payments and annual rentals paid by lessees for properly developed by the municipalities 22)
  • • Road Excavation Fees (charged for utilities, which lay pipes and cables under roads)
  • • Other (generating minimal revenues).
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