Survey Underway to Levy Property Tax on Commercial Establishments in Slums
MUMBAI: The Brihanmumbai Municipal Corporation (BMC) announced on Thursday that it will impose property tax on all commercial establishments in slum areas but emphasized that this taxation does not legalize unauthorized structures.
The assessment and collection department has already begun surveying commercial establishments in slums as part of this tax initiative. Under the Mumbai Municipal Corporation Act of 1888, property tax is levied on land, buildings, and other properties within BMC’s jurisdiction as part of regular tax collection.
50,000 Commercial Units in Slums to be Taxed
Mumbai has around 2.5 lakh slums, of which approximately 20% (50,000 units) are used for commercial purposes, including shops, godowns, hotels, and small-scale industries.
Civic chief Bhushan Gagrani, in his budget speech on February 4, estimated that the new property tax could generate an additional ₹350 crore in revenue for 2025-26. He justified the move, stating that since these establishments benefit from BMC’s infrastructure services, it is necessary to bring them under the tax net.
BMC Clarifies Taxation Does Not Equal Legalization
The move has sparked debate, with some citizens arguing that imposing property tax on unauthorized commercial structures might be seen as legalizing them.
However, the BMC firmly stated that taxation does not equate to legalization. Referring to Section 152(A) of the Mumbai Municipal Corporation Act, 1888, the civic body clarified:
“If any building or part of a building has been constructed or reconstructed illegally and tax or penalty has been levied on it by the administration, it does not mean that the said construction or reconstruction is legalized.”
Implementation and Future Implications
With 50,000 commercial slum establishments set to be taxed, the BMC survey is currently underway, and officials are assessing each property to determine the tax amount.
This taxation policy is expected to provide a significant boost to BMC’s revenue while ensuring that commercial operators in slum areas contribute to city infrastructure expenses. However, concerns remain over the impact on small businesses and potential legal challenges from property owners.
