Newsline had first reported on January 23 that property tax was set to increase in the next financial year. After the implementation of the Unit Area Method in 2004, property tax was to be revised every three years.

A Municipal Valuation Committee, to be constituted every three years, conducts a study based on the Consumer Price Index and suggests changes in taxes. Section 116-J of the Delhi Municipal Act says if taxes are not revised for three years after the implementation of the Unit Area Method, they will be increased or decreased based on the change in the Consumer Price Index. It has been five years since the Unit Area Method has been implemented, but there has been no increase in property tax.

With the implementation of the Sixth Pay Commission in the MCD, sources in the corporation say, they will have to increase taxes to meet the additional cost. Also, if MCD does not increase property tax, it will lead to a marked reduction in its funds.

The Municipal Valuation Committee had submitted its report to the House in July 2008, proposing an increase of 15 per cent tax for commercial units. It was, however, rejected. An in-house Indexation Committee, was set up by the commissioner’s office four months ago. The committee prepared its report based on the increase in per capita income and that in property rate in the city.