The New Delhi Municipal Council announced on Monday that the implementation of the Unit Area Method (UAM) could lead to a reduction in property tax by 30 to 50 percent, particularly benefiting older and self-occupied properties.
This initiative is part of significant amendments under the Jan Vishwas (Amendment of Provisions) Bill, 2026, which was presented by Minister of State for Commerce and Industry Jitin Prasada in the Lok Sabha on Friday.
The bill suggests various modifications to the Delhi Municipal Corporation Act of 1957. Emphasizing the advantages of UAM, NDMC Vice-Chairperson Kuljeet Singh Chahal stated that it could result in a decrease of 30 to 50 percent in property tax, especially for older and self-occupied properties.
The age factor will provide relief for older properties, and the bifurcation will facilitate separate assessments of different sections of a property, such as shops and storage. The system also allows for self-assessment and online payment, simplifying the process and enhancing transparency while minimizing disputes, he added.
While addressing traders at a meeting in Connaught Place, Chahal mentioned that the proposed system would also lower the maximum property tax rate from 30 percent to 20 percent, providing a direct 10 percent relief to taxpayers within the NDMC jurisdiction. “The new method will replace the current rental value-based system with a uniform unit area-based assessment, ensuring that similar properties are taxed uniformly and reducing disparities within the same locality,” Chahal remarked.
Chahal assured traders that tax rates would not be raised arbitrarily and that comprehensive consultations would be conducted with their representatives prior to implementation to enhance the system’s transparency and effectiveness. In the meantime, traders expressed their support for the introduction of the UAM, although they raised several concerns regarding its implementation, particularly in relation to tax rates, enforcement powers, and fairness in recovery mechanisms.
Atul Bhargava, the President of the NDTA, called for equality in taxation, stating, “There should be ‘one city, one tax’. The same rates that apply in MCD areas ought to be enforced in NDMC as well.” He expressed concerns regarding coercive enforcement, remarking, “We do not wish for officials to arrive and seal shops. At most, they should attach the property or the rent for recovery. It is unacceptable to impose arbitrary demands and then seal a location if the individual seeks legal recourse.”
He emphasized that the majority of traders in Connaught Place are compliant taxpayers. “We are businesses that pay GST and income tax. However, when officials visit, they act as if we are criminals,” Bhargava stated. Chahal elaborated on the advantages, noting that the introduction of an age factor would offer relief to older properties, while provisions for bifurcation would facilitate separate assessments of different sections of a property, such as shops and storage areas.
He further mentioned that the system would allow for self-assessment and online payment, thereby simplifying compliance and minimizing disputes. Bhargava also highlighted structural challenges in property ownership.
“In the past, plots in Connaught Place were sold in lots. Currently, a single plot may contain multiple shops. If some shops default, the outstanding amount is charged to the entire plot. Why should my shop be penalized if I am consistently paying? Actions should only be directed against defaulters,” Bhargava asserted.
The vice-chairperson noted that the civic body collected Rs 1,045 crore in property tax last year and anticipates that this amount will increase to approximately Rs 1,350 crore this year. Chahal mentioned that as part of a special initiative to encourage PNG connections, NDMC has suspended road restoration fees for three months for pipeline work conducted by Indraprastha Gas Limited (IGL).
