Demonetisation: Tamil Nadu witnessing sharp rise in property tax collections

In a positive spin-off of the Centre's demonetisation move, local bodies in Tamil Nadu are witnessing a sharp rise in property tax collections, with the authorities allowing payments with scrapped Rs 500 and Rs 1,000 notes.

The Tiruchirappalli and Madurai corporations which usually collect a net average collection of Rs 40 lakhs and Rs 70 lakhs per day respectively have clocked more than Rs 2 crore receipts in the last two days, officials said.

The demonetisation of high-denomination currency has come as a boon to local bodies, which had been issuing repeated demands for payment of property tax dues.

Long queues were seen in most of the tax counters of the two civic bodies with people realising that it was an easy option to exchange the high denomination notes, with banks witnessing heavy rush.

The Tiruchirappalli corporation netted a revenue of Rs 2.35 crores on a single day on Friday and people continue to pay the tax on Saturday also, an official of the civic body said.

Property tax collection in the Madurai Corporation on Friday stood at Rs 2.50 crores with the taxes paid ranging from Rs 500 to Rs two lakh, another official said.

Madurai Corporation officials said they would accept the Rs 500 and Rs 1,000 notes till the government allowed it.

"Repeated demand notices did not evoke any response from the taxpayers. But the demonetisation has worked (resulting in more payments)," said an official.

The government has extended use of old defunct 500 and 1,000 notes for paying household utility bills, fuel, taxes, fees and purchases from co-operative stores till November 14.