SC upholds HC verdict against rules pushing up land property tax

In a huge relief for property owners and developers, the Supreme Court allowed the new taxation regime but scrapped three rules that had enabled the BMC to take into consideration the development potential of land to arrive at its ‘capital value’ and sent taxes spiralling

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Mumbai: The Supreme Court on Monday upheld an April 2019 Bombay high court judgment that had struck down three rules to fix the ‘capital value’ of land where construction is set to start under a new property tax regime.

In a setback for the BMC, the SC judgment by a bench of Chief Justice U U Lalit and Justice Bela Trivedi is being viewed by property owners and developers as a major relief.

The new rules of the BMC had led to much higher property taxes for the developers, who challenged the constitutional validity of the new regime for computing property taxes. Property tax is among the biggest and “crucial” revenue sources for the BMC, especially since the abolition of the octroi.