Civic body issues notices to over 50 hotels for suspected property tax evasion

The Property Tax Department of the Municipal Corporation (MC), Amritsar, has issued scrutiny notices to more than 50 hotels suspected of underpaying property tax by falsely declaring leased properties as self-occupied. Officials estimate that a large number of commercial establishments, particularly hotels, have been operating on lease while paying the lower self-use tax rates.

Joint Commissioner Surinder Singh will conduct hearings in these scrutiny cases beginning next month. Under property tax rules, commercial properties on rent are liable to pay 7.5 per cent of their annual rental value as tax. In contrast, self-occupied properties are taxed at fixed rates based on their category — Rs 5 per sq ft in Category A, Rs 3 in Category B, and Rs 2 in Category C areas.

If scrutiny reveals that a property declared as self-occupied is actually rented, the MC will recover the tax difference, along with penalties and interest for previous years. Officials estimate that nearly 70 per cent of the city’s hotels operate on lease.

MC records indicate that Amritsar has over 1.5 lakh taxable properties, yet fewer than 50,000 property tax returns are filed annually. Of these, around 70 per cent are residential and 30 per cent commercial properties, many of which are still defaulting on payments.

So far this fiscal year, the MC has received 46,000 returns, a marked improvement over 28,000 during the same period last year, raising optimism that the 50,000 mark will be surpassed. The civic body has already collected Rs 36.72 crore in property tax, compared to Rs 28.09 crore last year — an increase of Rs 8.63 crore. Officials credited this rise partly to the one-time settlement (OTS) Scheme, which has encouraged more taxpayers to clear their dues.

Mayor Jatinder Singh Bhatia appealed to residents to pay their taxes promptly to avoid penalties and interest. “Property owners should settle their dues on time to prevent heavy fines,” he said.