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GHMC hopes to rake in Rs 300 cr as profession tax
October, 07th 2013

After initiating several measures like geographical information system (GIS)-based survey to bring unassessed properties into the property tax net, the GHMC is now eyeing the nearly Rs 300-crore profession tax pie.

Until last year, profession tax collection was with the commercial tax department and it was transferred to the corporation in November 2012 on the directions of the chief minister. Officials claim that though the profession tax demand was over Rs 300 crore per annum, it was getting only Rs 100 crore as the commercial taxes department was not concentrating on 100% collection as it was just another tax component for them.

The GHMC officials said as per commercial taxes department records, there were only 48,000 professionals, employees and traders paying profession tax in the core area of the corporation, while it could be more than a lakh. Similarly, only 15,000 lawyers have been paying the tax whereas the number of practicing advocates was over 30,000 in the city.

Now, in a bid to bring more professionals into the tax net, the GHMC has started building a database of various professions. Nearly, 20 types of professionals come under the tax net. Lawyers, doctors, architects, journalists, charted accountants, engineers, IT professionals and brokers who have been in the field for more than five years have to pay Rs 2,500 per annum.

Employees drawing between Rs 15,000 and Rs 20,000 have to pay Rs 150 per month and people with salaries of more than Rs 20,000 have to pay Rs 200 per month.

Sources said the data would be collected from professional bodies like bar associations, Indian Institute of Architects, Indian Medical Association and other registered bodies of professionals. The existing data would be compared with data collected from different agencies. "As of now, the demand is Rs 15 crore to Rs 20 crore per month. After building the database and plugging holes, the profession tax demand may go up to Rs 25 to Rs 30 crore per month," GHMC additional commissioner (Finance) K Ashok Reddy told TOI.

Meanwhile, the GHMC has decided to ask the state government to transfer the entire tax amount to the corporation without any hitches. As of now, the commercial taxes was collecting profession tax amount and transferring it to the head of account of GHMC.

For transferring the profession tax to the civic body's account, the revenue department had put a clause that the corporation should get nod from the finance department to release the amount every quarter. However, the finance department has not been releasing the amount regularly, officials said. In the current financial year, the finance department has permitted to give only first quarter (April, May and June) of 2013 and the second quarter amount has not been released yet. During the last financial year (2012-13), it got only Rs 100 crore.

"The GHMC will write a letter to the state government to release profession tax amount every month instead of every quarter and also remove the clause of prior permission for release of the tax amount," Reddy said.

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