16 March 2021, Chandigarh, IN: While taking first of its kind decision, Haryana Government has decided not to levy any property tax on the land used for agriculture only in urban areas. With this, Haryana has become the first state in the country to exclude land used for agriculture only from the purview of tax by making amendments in the section of the property tax itself.
On March 15, 2021, Haryana Government by passing this bill in the Vidhan Sabha during the ongoing budget session had made this provision exclusively in the law imposing property tax.
Giving detailed information in this regard, an official spokesperson said that according to the provisions mentioned in serial number 49 of List-II (State List) of the 7th Schedule of the Constitution of India, state governments have the right to levy property tax on lands and buildings. On the basis of this, property tax is levied on lands and buildings by all the states and accordingly in Haryana property tax is also levied on both buildings and lands.
With the latest amendment made by Haryana Government, a provision has been made to levy property tax only on the basis of the value of the property and to set a minimum rate for property tax. The municipalities will also have the right to levy property tax at higher rates than these minimum rates. This preface is as per the following recommendation of the Ministry of Housing and Urban Affairs, Government of India. These recommendations include notifying the floor rate of property tax as per the prevailing circle rates/guideline rates, putting in place a system of periodic increase in property in line with price increase.
As a result of implementing these reforms in property tax, the state will get an additional 0.25 percent of Gross State Domestic Product (GSDP) as a loan. So far, five states namely Rajasthan, Andhra Pradesh, Telangana, Madhya Pradesh and Manipur by making such amendments have been recommended to give 0.25 percent as additional loan by the Ministry of Finance, Government of India.