The Greater Chennai Corporation hiked trade license fees affecting nearly 75,000 establishments in the city.
News Tamil Nadu

Dravidian Model: After Hiking Property Tax, Electricity Tariff, Water Tax, DMK Govt Increases Professional Tax By 35%

July 30, 2024
The Commune

In April 2022, the DMK government in Tamil Nadu announced a property tax hike ranging from 25% to 150% across various corporations, municipalities, and panchayats. In Chennai, houses under 600 sq ft saw a 50% increase, those between 600-1200 sq ft saw a 75% rise, and houses between 1,201-1,800 sq ft experienced a 100% increase. Properties over 1,801 sq ft faced a 150% hike.

In April 2023, Chennai Metrowater increased water and sewerage charges by 5% for residential and 10% for commercial consumers to address revenue-expenditure gaps. Residential charges rose from ₹80 to ₹84 per month, and commercial from ₹250 to ₹263. Metered connections started at ₹42 (up to 10 kl) from ₹40. Mobile water tanker fees also increased, with a 6-kl load costing ₹499, up from ₹475.

In July 2024, TANGEDCO increased the electricity tariff by 4.83% for all consumers in the state. Being a bi-monthly billing, this further burdens the end user.

People of the state have been burdened by the tax increases ever since the DMK government came to power. To add more salt to injury, the Chennai corporation passed a resolution to increase professional tax by 35%. This resolution was passed during the monthly council meeting of the Chennai Corporation, chaired by Mayor Priya on 30 July 2024.

During the session, over 30 resolutions were approved, including notable decisions such as raising the fine for stray cows on roads from ₹5,000 to ₹10,000.

According to the Tamil Nadu Urban Local Bodies Act, 1998 Section 1/7 A-1 and the Tamil Nadu Urban Local Bodies Rules 2023 Sections 274-288, professional tax rates can be revised every five years, with an increase ranging from 25% to 35%. The last increase in Chennai was in 2018. The new resolution implements a 35% increase from the existing tabular amount.

The revised tax structure exempts individuals with a monthly income below ₹21,000 from any increase. For those earning between ₹21,000 and ₹30,000, the tax will rise from ₹135 to ₹180. Individuals with an income between ₹30,000 and ₹45,000 will see an increase from ₹315 to ₹430. Those earning between ₹45,000 and ₹60,000 will experience a rise from ₹690 to ₹930. This tax is payable every six months.

Additionally, the council passed a resolution proposing to the government the uniform implementation of professional tax rates across Tamil Nadu based on the corporation’s recommendations regarding the revision.

Netizens were enraged by this move and pointed out that it was the Dravidian Model, which always hiked tax rates and tariffs for its residents, and that it was better to do business elsewhere in the country.

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