Pune: PMC’s Financial Plans Hit as Property Tax Collection in New Villages Is Suspended
Pune, 20th October 2024: Ahead of the Maharashtra Legislative Assembly elections, the state government has suspended property tax collection in 32 newly included villages within the Pune Municipal Corporation (PMC) limits. These villages, integrated into the PMC since 2017, were also subject to a review of the tax rates. The government has instructed the PMC to levy property tax at double the rate applied when the villages were under Gram Panchayat jurisdiction, while ordering the suspension of any tax collection until a decision is finalized.
This suspension is expected to cause a significant financial blow to the PMC, sparking concerns over potential disputes between residents in the old and new boundaries regarding the tax structure. The Maharashtra Government had already paused tax collection in these villages before the Lok Sabha elections, further delaying a conclusive resolution, raising concerns about the PMC’s financial stability.
In 2017, 11 villages were brought under the PMC, followed by an additional 23 villages in 2021. Property tax collection in these areas was initiated based on PMC’s municipal tax rates, which are notably higher than the taxes levied by Gram Panchayats. Consequently, residents of these villages demanded the government cancel the property tax, including those in Uruli Devachi and Phursungi.
While the government has now suspended tax collection for 32 villages (excluding Uruli Devachi and Phursungi), it has also proposed the formation of a new municipal council to address their governance. In total, 4,37,345 properties in the 34 villages incorporated into the PMC were affected by the change. The PMC had issued tax bills amounting to approximately ₹595 crore for the financial year 2024-25, which would have contributed around ₹600 crore to the PMC’s revenue.
However, the state government’s order to apply Gram Panchayat taxation rules will slash the expected revenue by ₹400 crore, reducing the total income from ₹600 crore to ₹200 crore. This marks a substantial loss of ₹400 crore in potential revenue for the PMC.
