Property Tax is one of the major sources of revenue for the Municipal Corporation of Delhi (MCD). The rapid growth of Delhi has resulted in a manifold increase in the workload of the Property Tax Department of MCD. It was soon very clear that some form of an automated system would have to be introduced to cope with the increasing workload and ensure proper monitoring of the entire tax collection process. In response to the situation, MCD decided to go in for computerization of the entire tax collection process, and requested the National Informatics Centre to submit a proposal to this end. After conducting a thorough study of the existing system in the Property Tax Department, NIC came up with a suitable proposal for computerization. On the basis of this proposal, NIC was awarded a turn-key project for computerization of all property tax collection operations in all the 12 Zones of the Municipal Corporation of Delhi.

According to the Memorandum of Understanding signed between MCD and NIC, NIC's major responsibilities in the project included:

  • Developing and implementing appropriate software
  • Maintaining the Management Information System (MIS)
  • Imparting training to MCD personnel for running the MIS

A Study of the Existing System

In order to get a better perspective of the project it is essential to be familiar with the existing manual system of property tax collection in the Capital. Delhi is divided into 12 tax zones, each of which are further divided into areas. Property tax is calculated on what is known as the Rateable Value (RV) of the property. The RV is calculated on the basis of an assessment, as laid down in the Delhi Municipal Corporation (DMC) Act, 1959. For this purpose, the inspector who does the survey notes down details such as the area of the land, the floor areas of the constructions, period of construction, details of tenancy, etc., and files these details to the assessing officer concerned. The assessing officer, on his part, carries out the assessment and calculates the RV as per the procedures laid down in the DMC Act. The RV is then finalized after giving due consideration to any objections on the part of the owner. Property tax is levied on this RV according to tariffs that come into effect from time to time. The bill is then sent to the tax payer requesting him to pay his dues within a certain time period. In accordance with the rules, rebate is awarded to tax payers who clear their dues on time. Defaulters get demand notices directing them to make the payments or face penal actions. If the tax payer goes to court contesting the validity of penal actions, a judgement from the court is awaited before initiating any further action. Every year, a tax collection target is fixed for each zone and monitored on a month-to-month basis.

Benefits of Computerization

Computerization of property tax collection has yielded rich dividends. The benefits are markedly visible:

  • Fast, error-free billing: The output of a billing clerk has jumped from an average 100 bills per day to 1,000 bills per hour after computerization. Computer bills are accurate and error-free.
  • Better service to tax payers: The net waiting time to make payments has been reduced drastically from an average of 15 payments an hour to 75 payments an hour after computerization.
  • Improved monitoring: The computerized system provides various MIS reports such as status of collections and dues according to zone area and property. The collectors only have to press a key for the information necessary to plan recovery strategies.

Proposed Computerized System

Manual management of an overwhelming process such as property tax collection is bound to be slow and cumbersome. NIC's proposed computerization project takes into consideration all facets of the process property tax collection and envisages an MIS with two basic modules:

  • The Assessment Module: This module comprises components such as filing of form-A3 (inspection details); assessment of unit; RV; appeals of the tax payer for ratification of RV, mutation, etc. and their redressal; monitoring of court cases on disputed property assessments; and assessment of RV based on the recently introduced self-assessment scheme.

The Collection Module

The collection module takes into account components such as tax calculations, billings, receipt of payments, award of rebate, issue of demand notices, initiation of penal actions, printing of MIS reports, etc.

Plan of Implementation

As the components covered under the Collection Module comprises of 70 per cent of the workload of the Department, it was decided to implement this module in the Special Assessment Unit as the first phase of the project. In the second phase, the Collection Module will be implemented in all the zones of MCD. The third phase will consist of implementation and testing of the Assessment Module in the Special Assessment Unit; and the project will achieve completion with the final phase of extending the Assessment Module to all the zones of MCD. There is also a provision to link all these zones through networking.

Progress of the Project

The project has seen rapid progress. The first phase was completed within three months with the implementation of the Collection module at the Special Assessment Unit. As a part of the second phase, data entry and billing for six major zones, comprising of 4 lakh properties, were completed by 1994. At this rate it is expected that implementation of the Collection Module will be achieved in at least two major zones by March, 1995. Work is already underway to begin data entry for the six remaining zones.

And all these have been possible only due to the support and co-operation extended by MCD. Special mention must be made of Mr VC Chaturvedi, IRS, Assessor & Collector, who went beyond his call of duty for the success of the project.