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Delhi: NDMC Tax Reform May Cut Property Tax Up to 50% Under Unit Area Method

  • by- Grihik
  • Mar 31, 2026
The New Delhi Municipal Council has announced that implementing the Unit Area Method for property tax could reduce taxes by 30 to 50 per cent, particularly benefiting old and self-occupied properties. The maximum property tax rate will also be reduced from 30 per cent to 20 per cent.
Delhi: NDMC Tax Reform May Cut Property Tax Up to 50% Under Unit Area Method

New Delhi, March 31: The New Delhi Municipal Council (NDMC) has proposed a major property tax reform under the Unit Area Method (UAM) , which could lead to significant tax reductions for property owners. The move is part of key amendments under the Jan Vishwas (Amendment of Provisions) Bill, 2026.

Key Benefits of Unit Area Method

Kuljeet Singh Chahal, NDMC Vice-Chairperson, highlighted several benefits of the new system:

  • Tax reduction of 30 to 50 per cent, especially for old and self-occupied properties

  • Maximum tax rate reduced from 30 per cent to 20 per cent , offering direct 10 per cent relief

  • Age factor will provide relief for older properties

  • Bifurcation allows separate assessment of different portions of a property (such as shop and storage)

  • Self-assessment and online payment make the process simpler and more transparent, reducing disputes

"The new method would replace the existing rental value-based system with a uniform unit area-based assessment, ensuring that similar properties are taxed equally and reducing disparities within the same locality," Chahal said.

Traders' Response

Traders welcomed the introduction of UAM but raised several concerns regarding implementation, particularly about tax rates, enforcement powers, and fairness in recovery mechanisms.

Atul Bhargava, President of the NDTA, called for parity in taxation: "There should be 'one city, one tax'. The same rates applicable in MCD areas should be implemented in NDMC as well."

Concerns Over Enforcement

Bhargava also raised objections to coercive enforcement: "We do not want officials to come and seal shops. At most, they should attach the property or the rent for recovery. You cannot raise arbitrary demands and then seal a place if the person goes to court."

He added that most traders in Connaught Place are compliant taxpayers: "We are GST-paying, income tax-paying businesses. Yet when officials come, they behave as if we are thieves."

Structural Issues

Bhargava pointed out structural issues in property ownership: "Earlier, plots in Connaught Place were sold in lots. Today, one plot may have multiple shops. If some shops default, the outstanding is imposed on the entire plot. Why should my shop be attached if I am paying regularly? Action should be taken only against defaulters."

Revenue Expectations

The NDMC collected ₹1,045 crore in property tax last year and expects the figure to rise to around ₹1,350 crore this year.

Assurance from NDMC

Chahal assured traders that tax rates would not be increased arbitrarily and that detailed consultations would be held with their representatives before implementation to make the system more transparent and effective.

Other Initiative

In a separate announcement, Chahal said that under a special initiative to promote PNG connections, NDMC has waived road restoration charges for three months for pipeline works carried out by Indraprastha Gas Limited (IGL).