What are amnesty schemes and their benefits?
A tax amnesty scheme is a provision that allows taxpayers to voluntarily disclose and pay their tax dues in exchange for avoiding penalties. Municipal departments regularly come up with amnesty schemes to allow property tax defaulters to pay their property tax dues with relaxation in the form of rebates in tax penalties and interests. These tax waivers are usually available for a limited time.
Here’s a complete guide on amnesty schemes and their benefits.
Property tax amnesty schemes
Property owners are required to pay their property tax. Taxes collected by municipal authority are utilised for the maintenance of infrastructure. Municipal authorities levy penalties on those who default in paying their taxes and interest on tax dues. Municipal departments periodically introduce amnesty schemes to reduce the burden of additional charges on defaulters.
In other words, a property tax amnesty scheme is a tax relief in the form of rebates offered by the municipal authorities to allow a window for the tax defaulters to clear their dues.
These amnesty schemes are designed around three components of the property tax dues, which comprises principal tax amount, penalty for delayed payment, and interest imposed on the total amount. These components result in a significantly high charge. Thus, amnesty schemes help reduce the burden of additional interest and penalties through rebates.
Taxpayers can approach the nearest municipal office to know the estimated tax dues and pay the amount in the specified period. In some amnesty schemes, there are certain clauses that are subject to factors, such as property location, property category, defaulter period, etc.
Advantages of tax amnesty schemes
The municipal authorities regularly announce amnesty schemes in stages to encourage participation from taxpayers. Property tax amnesty schemes are beneficial for tax defaulters and municipal authorities. These schemes provide the property owners with a waiver on penalty and interest levied to a certain percentage. Moreover, defaulters are given the opportunity to clear all tax dues in one go.
Failure to make the payment of property taxes can lead to legal implications involving recovery of tax dues, additional fine and rigorous imprisonment, based on the severity of the case. If the property is sold, the owner will need to provide proof of payment of all dues. Without property tax payment receipts, the deal may be cancelled.
Amnesty schemes help municipal departments increase their annual revenue. With these schemes, the authorities encourage people to pay their taxes. The taxes collected are utilised in the development and maintenance of various facilities and infrastructure.
Payment of tax dues under tax amnesty schemes
Taxpayers can make payment of their property tax dues online and offline.
Taxpayers can make an offline payment for their tax dues by visiting the nearest municipal office and following the procedure. The payment can be made through different modes such as cards, cash, and demand drafts.
Taxpayers can pay their tax dues online by visiting the official portal of the respective municipal authority. One is required to sign up and create a user account on the website. Then, they can enter the location to check for the respective property, find the due amount and pay the tax online using payment gateways.
What is an income tax amnesty scheme?
Taxpayers may under report their income to avoid paying income tax, which can result in revenue loss for the government. Thus, the government introduces an income tax amnesty scheme to collect these unidentifiable taxes. The scheme enables taxpayers to voluntarily disclose and pay a specified tax amount in return for a waiver of tax liabilities like penalty, interest, etc. The scheme is valid for a limited time for a certain group of taxpayers.
FAQs
What is amnesty scheme in MCD?
The Municipal Corporation of Delhi (MCD) is responsible for introducing amnesty schemes for property tax in Delhi. SAMRIDDhi scheme was launched on October 26, 2022, which allows those who have not paid their property taxes in previous years to make a one-time payment and get a rebate on the total tax amount. The scheme is valid till March 31, 2023.
What are amnesty schemes in Maharashtra?
There are several amnesty schemes introduced in Maharashtra. Navi Mumbai Municipal Corporation (NMMC) launched an amnesty scheme during October 2021 to February 2022. It allowed a waiver of 75 percent on delayed tax payment charges. In the earlier scheme, Pune Municipal Corporation (PMC) allowed a waiver of 75 percent for property tax defaulters.
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