In-house Shops in Bengaluru Residences Targeted for Taxation, BBMP Issues Notices

In-house Shops in Bengaluru Residences Targeted for Taxation - BBMP Issues Notices - TAXSCAN

The Bruhat Bengaluru Mahanagara Palike (BBMP), actively pursuing property tax collection, has extended its efforts beyond SMS notifications to property tax defaulters. Notices are now being dispatched to shops operating in residential areas, urging them to fulfil their tax obligations.

According to BBMP regulations, shops and small hotels in residential zones should be classified as ‘commercial’ entities, necessitating the payment of taxes on a commercial scale, as emphasised by a senior BBMP official. The municipal body is adopting diverse strategies to enhance property tax collection.

Simultaneously, BBMP is issuing notices to properties that have under-evaluated their assets, failed to report new additions (such as additional floors or rooms), and evaded taxes.

Residents, particularly in areas like Srirampura under BBMP’s Gandhinagar revenue division, have reported receiving notices instructing them to settle property tax dues exceeding Rs. 2 lakh. Instances involve property owners making structural additions, constructing extra floors, or renting spaces for commercial purposes.

Property owners are required to remit differences in property tax, coupled with cess, from the time of the additional construction. Notably, properties with commercial electric connections have been included in this directive.

Several property owners across the city have received BBMP notices, compelling them to pay property tax for units operating commercially and settle discrepancies in property tax assessments along with accrued interest. While some property owners have promptly paid their dues to avoid BBMP action, others are hopeful for a potential reduction in tax burdens, considering the substantial amounts they are required to pay.

A senior BBMP official clarified the rationale behind the notices, stating, Shops utilising power supply from BESCOM under the commercial category must, similarly, fulfil their tax obligations as commercial units rather than residential entities. This move by BBMP represents a comprehensive approach to ensuring tax compliance from various sectors within the city.

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