Municipalities of Kerala - Municipal Finance

Municipal Finance

The resources of the urban local bodies are

• Tax and Rates
• Fees and Fines
• Non Tax revue
• Grand and Contribution

The taxes among them are:-

• Property tax
• Profession tax
• Entertainment tax
• Additional Entertainment tax
• Advertisement tax
• Show tax
• Timber tax
• Duty on transfer of properties (Surcharge duty)

Types of Taxes

• Property tax

This is the main stay of municipal revenue. It is levied under section 233 of the Kerala Municipality Act. 1994 on all building and appurtenant lands within the municipal limits except those exempted by or under the said Act or any other law. The property tax may comprise a tax for general purpose and a service tax viz., Water tax, drainage tax, lighting tax and Sanitary tax in Corporations and in Municipalities the tax may comprises a tax for General Purpose, lighting tax and sanitary tax and water tax. The rate of tax part from 10 to 25% of the annual value of a building in the case of municipalities and 15% to 25% in Corporations. The annual rental value of a building will be re-fixed once in 5 years and it is payable half yearly. The council is the authority to fix the rate of tax to be levied by each municipality. For online payment of property tax using credit/debit card or internet banking use http://tax.lsgkerala.gov.in

• Profession tax

As per section 245 of the Kerala Municipality Act 1994 the****are at***** to levy and collect profession tax from every person or company who transacts business exercised a professional; trade or calling or holds any appointment not less than 60 days in the aggregate in any half year and in respect of a specified amount of half yearly income

• Advertisement tax

This item of tax is levied from persons who erect, exhibit fix or retain upon or over any land, building, wall structure any advertisement or who display any advertisement in public view at any place private of public./ The urban local bodies are at liberty levy the tax not less than and not more than the rate specified by the Government

• Duty on transfer of property

This is levied under section 270 of the Kerala Municipality Act 1994 and the Kerala Municipalities (Duty on transfer of property) Rules 1962. It is levied in the form of a surcharge on the duty imposed by the Kerala Stamp Act. 1959, on every instrument relating to immovable property situated within the municipal limit at such rate as may be fixed by Government not exceeding 5%. The amount is being collected by the Registration Department and later on apportioned to and distributed to the urban local bodies quarterly by the Inspector General of Registration after deducting a collection charge as permitted by the rules referred to above.

• Entertainment tax

As per Local Authorities Entertainment Tax Act and Rules the Local Authorities can levy entertainment tax at a rate not less than 15% and not more than 30% on each price for admission to any entertainment. The tax is collected along with the price for admission itself. The major portion of the tax is collected from Cinema Theatres.

• Additional entertainment tax

As per section 2 (2) of the Kerala Additional Tax on entertainment and surcharge on show tax Act 1963 an additional tax on entertainment is collected at the rate of 60% of the entertainment tax Collection under this items is shown in annexure.