Two new taxes, including a ‘betterment tax’ on properties and a professional tax on individuals as well as hikes in property tax rates were proposed by North Delhi Municipal Corporation Commissioner Madhup Vyas while he presented the budget estimates for 2019-2020 on Friday.

The betterment tax, to be charged at 15% of the annual value of property tax of a site has been proposed in lieu of “increase in urban land value caused by the execution of any development or improvement work” Mr. Vyas said. The corporation expects a collection of ₹450 crore through this tax which, it said, was already being collected in other States.

Proposing the professional tax, Mr. Vyas said it had been suggested in the second and third finance commissions and would help reduce the corporation’s dependence on the Delhi government for funds.

Three tax slabs have been proposed — ₹1,200 for individuals earning between ₹2.5 lakh and ₹5 lakh a year, ₹2,400 for those earning between ₹5 lakh and ₹10 lakh and a tax of ₹2,500 for those earning above ₹10 lakh a year.

The corporation expects to generate ₹100 crore in revenue through this, he said. A corporation spokesperson said that the modalities of collecting this tax, whether as part of the income tax or to be paid directly to the corporation, would be worked out once it was approved.

Apart from the new taxes the Commissioner also proposed hikes in existing property tax rates. For residential falling under A to B category, he proposed a rate of 13 % instead of the existing 12%, for category C to E, a rate of 12% instead of 11% and for category F to H a rate of 9% instead of 7 %.

Apart from this, non-residential properties, including special non-residential properties will be charged 20% instead of the existing 15% rate. Additionally, it was proposed that 1% of the annual value of the property to be charged as education cess.

The increased rates are expected to add ₹100 crore to the corporation’s revenue, the commissioner said.

Approval

These taxes and hikes, which Mr. Vyas said were long overdue, will have to get approved by the political wing of the corporation, including the Standing Committee and the House before they can be implemented.