Chandigarh, June 15
After dithering for about a year, the Punjab Cabinet today approved imposition of property tax in a diluted form in urban areas in the state. The Cabinet also approved a proposal to amend the Punjab Municipal Act 1911 and the Punjab Municipal Corporation Act, 1976 to levy the property tax.

An ordinance will have to be issued to amend both the Acts. “Property tax will become operational after the ordinance is enforced”, said a government official. Though no date has been fixed from which the tax will be charged, sources said the ordinance would take effect from April 1 or from the current fiscal year.

The state government can earn an additional revenue of about Rs 300 crore, sources said. In the absence of revenue generation, the development process in urban areas has been severely affected. Besides, the BJP, a coalition partner of the Shiromani Akali Dal( SAD), has strong reservations on enforcing the tax in urban areas, the party’s support base. Adding to the woes of the state government, the Centre had refused to release funds for projects under the Jawarlal Nehru Urban Renewal Mission. Following an undertaking given by the State Government early this year, the Centre recently released some pending funds to the state.

The Cabinet today rejected the earlier proposed zone-wise unit value-based system. Under the system, each city was to be divided in various zones and the value of property falling within such zones was to be fixed by the Deputy Commissioner concerned. Property tax was to be calculated on the basis of that value.