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The Fifth State Finance Commission in Karnataka has recommended allowing property owners to pay property tax through monthly EMI-style instalments instead of a single annual payment. The proposal aims to reduce the burden of lump-sum payments and improve compliance among taxpayers in Bengaluru and other urban local bodies under the Greater Bengaluru Authority. The commission has also suggested measures such as door-to-door property surveys, digital verification through e-khata records, drone mapping and voluntary disclosure schemes to identify unassessed properties. Officials estimate that nearly 5 lakh properties remain outside the tax net, and bringing them under assessment could generate around INR 700 crore annually.
The Fifth State Finance Commission in Karnataka has proposed allowing property owners to pay their property tax through monthly instalments instead of making a single annual payment. The recommendation is part of a wider set of reforms suggested to improve property tax collection and make the payment process easier for residents in Bengaluru. Advertisement
The commission's report was recently tabled in the state legislative assembly and contains several suggestions aimed at strengthening the financial position of urban local bodies operating under the Greater Bengaluru Authority. The panel explained that many property owners find it difficult to pay the entire tax amount at one time, and dividing the payment into smaller monthly instalments could reduce the financial pressure while also encouraging people to pay on time.
At present, property tax in Bengaluru is generally paid as a lump-sum annual amount through the self-assessment scheme. Although some taxpayers convert payments into instalments using bank credit card facilities, civic authorities do not currently offer a structured EMI payment option. The commission recommended introducing an official instalment-based system so that residents can spread payments across the year.
The report also focused on expanding the city's property tax base. According to the commission, Bengaluru has around 20.5 lakh properties, but nearly 5 lakh of them are estimated to be outside the property tax system. These unassessed properties reduce the revenue available to civic authorities and create an imbalance in tax compliance.
To address this issue, the panel suggested conducting door-to-door property surveys across the city and verifying property records using digital databases. Officials believe that bringing these unassessed properties into the tax system could generate nearly INR 700 crore in additional annual revenue for the five municipal corporations functioning under the Greater Bengaluru Authority.
The commission also suggested strengthening property identification through the use of technology. It recommended using drone-based mapping and satellite imagery to identify buildings that may not be properly recorded in tax records. Linking property tax data with electricity connections, building licence records and the e-khata system was also proposed to detect newly constructed or modified properties that may not have been registered for taxation.
Another recommendation involves the introduction of voluntary disclosure and amnesty schemes for property owners who have pending tax dues or have not declared their properties earlier. Under such schemes, taxpayers would be allowed to declare their properties and settle outstanding taxes with reduced penalties. The report noted that similar programmes implemented in other cities have helped civic bodies increase compliance and bring more properties into the tax system.
The commission also highlighted the importance of incentives for timely payment. It referred to earlier rebate schemes where property owners received about a 5 percent discount for paying their taxes before the deadline. Continuing such incentives, according to the panel, could motivate more residents to clear their tax dues without delays.
Simplifying digital payment systems was another area discussed in the report. The commission suggested that civic authorities should collaborate with online payment platforms and mobile applications to make property tax payments easier and faster for residents.
Property tax remains one of the most important revenue sources for urban local bodies in Bengaluru. The funds collected are used for municipal services such as road maintenance, drainage systems, waste management and other civic infrastructure projects. With the city expanding rapidly and administrative responsibilities now shared among multiple municipal corporations under the Greater Bengaluru Authority, improving tax collection has become an important priority for the state government.
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