METHOD OF ASSESSMENT:

The method of assessment of lands and buildings for municipal

taxes is laid down in chapter-VIII of the HPMC Act, 1994. As per

provisions of the said chapter, the lands and buildings are assessed

on the basis of annual rent or where the annual rent is not

determinable, the assessment is arrived at 10% of the cost of err

action and cost of land. 10% statutory rebate is allowed for annual

repairs and maintenance charges. Where furniture is also let out

with a building, rebate not exceeding 10% of the rent is also

allowed.

In case the assesses deposits the property taxes bill within 15 days from the date

of its receipt, 10% rebate is allowed on the current year’s property taxes

demand or on the property taxes demand raised for the first time. Where the tax

bill is issued by post, the payment is required to be made within 18 days from the

date of sending the bill by post to avail the said 10% rebate. However, in case of

delayed payments i.e. the payments received after one month of the close of the

financial year, interest @1% per month is charged upto the date of payment. The

terms and conditions of the tax bill are already printed on the reverse of the tax

bill for information and guidance of the property tax payers.

WORKING PROCEDURE:

To determine the rateable value of the lands and buildings, the owners or

occupiers of such lands & buildings are served the requisition u/s 101 of the

HPMC Act, 1994 to furnish on Form-C the information with regard to the name of

the occupier(s) of their buildings, rate of annual rent payable by each occupier,

measurement of each floor of the building, year of construction and its cost of

eraction. The Tax Inspectors also visit their respective areas personally at least

once a year to find out the said information from the owners and occupiers.. The

owner and occupier is also supposed to furnish such information at their own. The

information so gathered/received is consolidated on Form No.23 which is called

as ‘Inspection Report’. Thereafter, on the basis of the said information, the Tax
Inspector proposes the assessment/amendment of assessment, as the case may

be, on Form No.10. After the proposal is scrutinised and okayed by the

AST/Secretary(Tax), Tax Assessment Notice is served upon the assessee

requiring him to file the objection, if any within one month. The objections

received against the proposed assessment are entered in the Register of

objections and placed for investigation before the Committee constituted u/s

94(5) of the HPMC Act, 1994. After the objections are investigated by the said

Committee, the assessment is got finalised by the Commissioner or by the officer

duly authorised by him in this behalf. The account is thereafter opened

simultaneously in the Assessment Register and the Demand & Collection

Register and computerised tax bill is thereafter issued to the assessee(s). In

case tax demand falls in arrear, action for recovery is initiated u/s 124 of the

HPMC Act, 1994.

GENERAL

1. Where the building or part thereof is in self occupation of the

owner as his residence, the covered area under self occupation

upto 100 sq. meters is fully exempted from tax assessment and on

the area beyond 100 square meters, assessment is made only on

50% area as per proviso No.2 to Section 88(c) of the HPMC Act,

1994.

2. Religious institutions like Temples, Mosques, Gurudwaras and

Churches etc. and its properties situated within M.C. Limits are

exempted from the payment of house tax (now general tax) vide

Govt. notification dated 04.11.1992 provided that income from such

religious institutions and their properties are used exclusively for

the maintenance of these institutions/properties and other religious

purposes. Sainik Rest Houses/Sainik Chhatralayas are also exempt

from payment of house tax (now general tax) vide Govt. Notification

dated 26.09.1980. The other taxes such as sewerage tax are,

however, chargeable.
3. The properties belonging to the Union of India earned and

acquired/ereeacted after 25.01.1950 are also exempted from the

payment of municipal taxes u/s 89 of the HPMC Act, 1994.

4. In case a rented out building or part thereof is vacated by the

occupier(s) and it remains un-productive of rent for more than 60

consecutive days, the owner is supposed to intimate the fact in

writing to the MC Shimla within 15 days from the date of vacation

and 2/3rd remission in general tax of the vacated premises is

granted till the premises is re-rented.

5. Whenever the title of any person primarily liable for payment of

taxes on any land and building is transferred, the person whose title

is transferred and the person to whom the same is transferred are

required to give notice of such transfer in writing to the Municipal

Corporation within three months after execution of the instrument

of transfer or after its registration or after the transfer is effected.

In the event of the death of any person primarily liable as aforesaid,

the person on whom the title of the deceased devolves shall give

notice of such devolution to the Corporation within six months from

the date of the death of the deceased. Every person who makes a

transfer as aforesaid without giving such notice to the Municipal

Corporation shall in addition to any penalty to which he may be

subjected shall be continued to be liable for the payment of all

taxes in respect of the land or building transferred until he gives

such notice but at the same time the liability of the transferee for

the payment of the taxes shall also not be affected.

6. Whenever any person primarily liable for the payment of any

taxes specified in Chapter-VIII of the HPMC Act, 1994 is required to

furnish the information u/s 101 of the Act ibid with regard to the

measurement, rent and actual cost etc. of his land or building but he

fails to comply with such requisition or fails to give true information

to the best of his/her knowledge, he/she can be precluded from

objecting to any assessment made by the Corporation in respect of

such land or building of which he/she is the owner or

occupier.Procedure to enter the property in tax records:-

When a property is transferred from one hand to another hand either

by inheritance or by sale, gift or otherwise, the person in whose

favour the property is transferred will apply to the Secretary(Tax),

M.C.Shimla requesting to enter the property in his favour. Attested

photo copy of regd. sale deed/gift deed, as the case may be, and or

the original or attested copy of the jamabandi is required to be

enclosed with such request. All the pages of the attested photo

copy of regd. sale deed/gift deed should be attested so that there

may be no chance of any tampering. In case the taxes are due

against the property for the period prior to the date of present

transfer that are also required to be paid first, only then the

request for transfer of the ownership is considered. Thereafter, on

receipt of such request, the case is put up to the Asstt.

Secretary(Tax)/Secretary (Tax) by the concerned tax inspector

seeking necessary orders to change the ownership of the property

accordingly in the tax records. After approval of such proposal by

the Asstt. Secretary(Tax)/Secretary(Tax), the case is again put up

by the concerned tax inspector to the Asstt.

Secretary(Tax)/Secretary(Tax) proposing the assessment of the

property and on approval of such proposal the tax assessment

notice is issued to the concerned person by the tax inspector. In

case no objection in writing is received from the concerned person

within one month from the date of such objection, the proposed

assessment is got confirmed from the Commissioner or from the

officer authorised by him in this behalf. Where the objection in

writing is received within one month against the proposed

assessment, the matter is placed before the Committee constituted

in this behalf. This Committee consists two elected Councillors and

the Commissioner or any officer of the Corporation authorised by

him in this behalf. The Committee investigates the objection, hears

the assessee as well as the concerned tax staff and thereafter

 gives its decision. This decision is got confirmed from the

Commissioner or the officer authorised by him in this behalf and

thereafter tax bill is issued to the assessee. On receipt of full

payment of the tax bill no dues certificate of taxes can be issued to

the assessee if he applies for the same for which nominal charges

of Rs.50/- are required to be paid. Where the assessee is not

satisfied with the decision of the said Committee, appeal can be

filed before the Divisional Commissioner, Shimla after fulfilling the

conditions as contained in Section 132 of the HPMC Act, 1994. If

any party is aggrieved from the order in appeal, revision against it

can be filed before the State Govt. u/s 134 of the H.P.M.C. Act,

1994.

7. Where there is no increase or decrease in the annual rental

value/annual rateable value of a property existing assessment

thereof is adopted as such with such alterations as may in

particular cases be deemed necessary as the valuation and

assessment for the next year. A Public Notice in the newspapers is

issued in this behalf at the end of a year for information of the tax

payers requiring them to file in writing objection(s) if any within one

month from the date of publication of the notice. The objections

which are received are investigated by the Committee constituted

u/s 94(5) of the HPMC Act, 1994 by giving opportunity of personal

hearing to the concerned objector(s).

8. Issue of taxes no dues certificate:

In case taxes no dues certificate is required by the assessee, he

should first make upto date payment of the taxes due along with

interest if any due against him. Thereafter he should apply on plain

paper to the Secretary (Tax)/Asstt.Secretary (Tax) for issue of no

dues certificate. The no dues certificate is thereafter issued for

which Rs.50/- as mentioned above are charged.

9. The Municipal Corporation Shimla(Taxation) Bye-Laws, 2004

are under approval with the State Govt.

10. New property taxation method i.e. Unit Area Method on Delhi

pattern is proposed to be adopted in Municipal Corporation Shimla

as required under the reforms of JNNURM. Necessary process is

already going on in this behalf. This method will be more easier,

effective and transparent as compared to the present system.

Besides, it is hoped that after this system is adopted, the income on

account of property taxes will also increase. The tax payers will file

their property taxes return every year themselves simultaneously

tendering the payment thereof.