BBMP’s OTS scheme for tax collection may come back

Bengaluru

The One Time Settlement (OTS) scheme is set to make a comeback in Bengaluru to help property tax defaulters clear their dues. The Bruhat Bengaluru Mahanagara Palike (BBMP) is planning to reintroduce the scheme sometime between October and December.

Earlier in 2024, the BBMP launched the OTS scheme in February, offering significant relief by waiving compounding interest on arrears and reducing penalties by 50%. Initially set to expire in July, the scheme was extended to September, and again to November 30 following public demand. Of the 3.95 lakh defaulters, more than 2 lakh availed the scheme, enabling the BBMP to collect nearly ₹1,000 crore. In the last financial year, the BBMP collected ₹4,930 crore, achieving 94.62% of its target.

In the current financial year, as of June 29, BBMP has collected ₹2,881 crore in property tax—45.25% of its ₹6,256 crore target. This marks a 67.73% increase compared to ₹1,696 crore collected during the same period last year.

A senior BBMP officer said the revenue department is planning to revive the OTS to boost collections. BBMP Special Commissioner (Revenue), Munish Moudgil, confirmed this to BLR.POST, stating that roughly 5 lakh defaulters have under-reported property area under the existing Self Assessment Scheme (SAS). A random check of 26,000 properties through the e-Khata system revealed a revenue leakage of ₹100 crore due to such under-valuation.

The BBMP is preparing to issue notices to these 5 lakh properties to recover unpaid taxes. Following this, the OTS will be reintroduced to encourage defaulters to pay their arrears. BBMP officials are optimistic that Deputy Chief Minister and Bengaluru Development Minister, D.K. Shivakumar, will approve the proposal, given his focus on increasing BBMP’s revenue.

However, with the proposed formation of the Greater Bengaluru Authority, which will divide the city into multiple corporations, the OTS scheme may have to be introduced separately for each corporation.

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