Urban land tax and quit-rent

A.M.Ibrahim. B.Arch., FIV, FIE (I)

Kadayanallur-Tamil Nadu

Urban Land tax and Quit-rent 

Key Words: (Land Systems prior to India independence ,Urban areas, Ceilings on holding urban lands by individuals, 2011 Census data of urban Towns and Quit-rent are discussed) 

Common law of India recognizes two rights in land, i. e, that of the Sovereign or his assignee and that of the Ryot (Subject) holding individually, or as a member of a joint family. Prior to free India (August 15, 1946) under the Madras Presidency, three categories of tenures existed, i.e., a) Zamindari System, b) Inamdari System and c) Ryotwari System.

In Free India, the land reform legislation was passed by all the State Governments touching upon the following measures; i) Abolition of intermediaries, ii) Tenancy reform measures like regulation of rent, security of tenure, iii) land to landless, and iv) implementing of ceiling legislation.

The Tamil Nadu Urban Land (Ceilings) Tax Act, 1966 (Act 12 of 1966).  Amendments appended: Act 30 of 1971, 19 of 1973, 54 of 1986, 1 of 1992, 26 of 1997...

The urban land tax payable in respect of any urban land shall be in lieu of the ryotwari assessment, the assessment levied under the Madras Inams (Amendment) (Assessment) Act, 1956, the ground-rent, the quit-rent, any amount levied under the Madras City Land Revenue Act, 1851 and such other amount as the Government may specify; but the urban land tax shall be in addition to any other tax on such land payable under any law for the time being in force.

DEFINITION of Urban Area

 About thirty urban areas are notified under different Tamil Nadu Government orders. 

 “Urban land” as per Tamil Nadu Act means any land which is used or is cable of being used as a building-site and includes garden or grounds, if any, appurtenant to a building but does not include any land which is registered as wet land in the revenue accounts of the government and used for the cultivation of wet crops.

“Market value” of any urban land shall be estimated to be the price which in the opinion of the assistant Commissioner or the Tribunal , as the case may be, such urban land would have fetched or fetch, if sold in the open market  on the date of commencement of this Act(Specified Date: 1^st July 1963 for assessment up to 30^th June 1975 and on the basis of market value of land as on 1^st July 1971 for assessment from 1^st July 1975, As for as Chennai City is concerned, however, in every case where revised market value as on 1^st July is more than double the value as on 1^st July 1963, the value for the purposes of assessment to tax will be limited to double the 1963 value). The market value of each urban was determined, with reference to the sales statistics of the lands in and around the area where urban land under reference is located. 

Ceiling Limit and Tax percentage of the market value:.

Where the aggregate extent of urban land held by the owner in the urban area 

Note: One Ground = 2,400 sqft or 223 sqm

 (*): % of market value on the extent in excess of two grounds which have the lowest market value.

(**): % of the market value of the whole extent.

(***): % of market value on the extent in excess of three grounds which have the lowest market value.

#: Urban land which is vacant or is used for residential purpose. 

(1) 2011 Census Data on Urban areas:                                                                                                         

Population of Rural and Urban Residence India: 

 Rural-Urban distribution is 68.84% & 31.16%. Level of urbanization is increased from 27.81% in 2001 census to 31.16% in 2011 census. The proportion of rural population declined from 72.19% in 2001 census to 68.84 in 2011 census. It is to be noted for the first time since independence, the absolute increase in population is more in urban area that is in rural areas. (1 Source: https://censusindia.gov.in/2011-prov-results/paper2/data_files/india/Rural_Urban_2011.pdf) 

Quit-rent: In Chennai land extent below two grounds is imposed with quit-rent. Quit-rent is a form of levy or land tax imposed on freehold-land or leasehold land by the State. A rent paid by the title holder of the freehold, by which he goes quit and free; that is, discharged from any other rent. 

(2) In pre-Independence India, in Bengal a quit-rent was paid on ghatwali lands (Ghatwali was a grant  to a ghatwal, a chief or other person for protecting the mountain passes and preventing raids from hill tribes on to the plain) in the district of Birbhum. In Bombay, Judi or Jodi, a quit-rent (Salami) was imposed by Marathas on free holdings, watani lands (one’s own land). (Source: (2) Land Systems of British India, Volume III by B.H. Baden – Powel). 

(3) In Madras Presidency in the year 1859 onwards, under the Inamdhari system, the Inamdhar (the grantee of the granted land) was offered the privilege of having his land freed from the reversionary claims of the State and converted into a freehold title by agreeing to the payment of a reasonable quit-rent. (Source: (3) Land Laws of Tamil Nadu by Prof. A. Chandrasekaran PP 30) Reprint in 2005 by C.Sitaraman & Co Pvt Ltd, a Law Book Publisher). 

In Chennai, when applied for fresh Patta, quit-rent will be imposed, Mr. “X” has purchased a 50 year old property, a G+2 building in 2012, the land extent is 850 sqft.and the total built-up area is about 1,700 sqft. After Tashildar’s approval, prior to issue of patta, quit-rent has to be paid. The quit-rent payable will be Rs. 420/=. The quit-rent is paid on May. 2013. The Karnam (Village Accountant) way of working is Fasli 1,381 to 1,422 = 42 years @ the rate of Rs/ 10/fasli year. The year for village accounts is the agricultural year/fasli year, which begins on the 1^st July and ends 30^th June. Quit-rent is charged to land only, which must be below two grounds (4,800 sq,ft or 446 sqm). If deducted 591 from the English year, the result is fasli year. 

Currently quit-rent is charged as below: (Not seen any official order and the statement below is based on receipt of a fresh Patta on May 2013) 

 Note: Base Fasli year is 1,381.

Always Patta has to be read in conjunction with the Karnam’s (Patwari’s) quit rent paid receipt or any official acknowledgement of fees paid. Patta is a sheet(s) showing field, assessment and remission allowed; In Chennai it includes Field Measurement Book Sketch (FMB Sketch).