The municipal authority, which experienced a decline in revenue during the 2024-25 fiscal year due to legal complications surrounding property tax collection in merged regions, may encounter a similar predicament in the 2025-26 financial year as the state government has maintained its prohibition on tax recovery.
In 2024, the state mandated the suspension of property tax collection from merged areas and directed the Pune Municipal Corporation (PMC) to impose property tax not exceeding twice the amount previously charged by the grampanchayats. This directive was issued following complaints from residents of the newly merged areas regarding the elevated civic tax rates.
The civic administration ceased the collection of property dues due to the lack of specific legal provisions in the Maharashtra Regional and Town Planning (MRTP) Act, 1966, which would allow charging more than twice the former grampanchayat tax.
Consequently, this resulted in a revenue loss of Rs 80 crore in the last fiscal year. PMC had aimed for a revenue target of Rs 2,492.83 crore from building permissions for 2024-25, while it anticipated revenue of Rs 2,549.79 crore from the property tax department. However, the PMC tax department generated approximately Rs 2,360 crore from property tax collection in 2024-25, whereas the building permission department accrued around Rs 2,600 crore.
Traditionally, property tax revenue has been the primary income source for the civic body; however, for the second consecutive year, the building permission department has outperformed in revenue generation. In the 2023-24 fiscal year, the PMC reported property tax revenue of approximately Rs 2,268 crore.
“The revenue from building permissions was allocated to PMRDA even after the villages were incorporated into civic limits. PMC is providing all essential basic services, and taxpayers in urban areas are being unfairly burdened to complete the infrastructure in the merged regions. This situation is unjust for the residents of the civic areas,” stated Prashant Badhe, a former PMC corporator.
According to officials from the property tax department, the civic administration identified properties and included them within the tax framework. This initiative contributed to an increase in revenue; however, it still fell short of achieving the set target.
“The civic administration will not be able to independently make the decision. The state government must amend the law prior to any tax reduction. The decision will need to be executed with retrospective effect,” stated Ujawal Keskar from the Aaple Pune, Apala Parisar organization. “There is no legal basis for imposing double the tax compared to the grampanchayat as instructed by the state.
The same directive has been reiterated, yet there is no clarity on how to enforce it without legal support. We will await the comprehensive orders,” remarked a senior official from PMC. The state directives were issued following a review meeting led by Deputy Chief Minister Ajit Pawar, who also serves as the state finance minister, in Mumbai on Tuesday. “These matters have been unresolved for years.
The administration must ensure basic amenities are provided to the merged areas. The collection of the tax should be suspended,” Pawar stated during the meeting.
