Bhubaneswar Municipal Corporation to Collect Rs 72 Crore Holding Tax from IDCO Lands
Bhubaneswar Municipal Corporation (BMC) has announced a major tax collection initiative. The civic body will collect Rs 72 crore in holding tax from properties built on land owned by the Odisha Industrial Infrastructure Development Corporation (IDCO). This collection will begin from the financial year 2025-26, following government approval received last year.
Educational Institutes Owe Significant Portion of Tax
Of the total Rs 72 crore, educational institutions established on IDCO land owe approximately Rs 32 crore. Civic officials confirmed this figure, highlighting the substantial contribution from the education sector. Holding tax serves as a crucial revenue stream for BMC, supporting municipal services and infrastructure development in Bhubaneswar.
Tax Collection Details and Enforcement Plans
BMC deputy commissioner (revenue) Ajay Mohanty explained the situation. "Earlier, we did not assess establishments on IDCO lands, including industrial clusters. After seeking and receiving government approval last year, we calculated the total holding tax on IDCO land at Rs 72 crore. From the first week of February, we will start enforcement and try to collect as much tax revenue as possible," he said. The corporation plans to intensify its collection efforts, targeting both current dues and arrears from various property types.
Tax Calculation Method and Legal Challenges
BMC calculates holding tax based on 0.5% of the land value in a specific area, which varies by locality. This is in addition to the building cost, calculated at Rs 1.35 per square foot of built-up area. Due to increased land valuations by the government in different parts of Bhubaneswar, the final tax amount rose in revised assessments. However, the Orissa High Court halted these revised assessments in 2021. Since then, tax has been collected based on old rates.
Some prominent educational institutions have challenged the assessed tax in the Orissa High Court. Despite this, BMC remains committed to its collection drive. The corporation also conducted special camps in November, involving residents' welfare associations to encourage tax payment. These efforts will intensify from February onward.
Broader Impact on Municipal Revenue
Holding tax is a vital component of BMC's revenue. Apart from educational institutions, government establishments, commercial properties, and residential houses pay this tax annually. The assessment is carried out by the civic body, with some properties having large current dues and others facing both arrears and current obligations. This new collection from IDCO lands is expected to significantly bolster BMC's financial resources.
