Maharashtra Assembly Tables Key Bill Giving BMC Full Control Over Property Tax Revisions; What it Means for Your 2026-27 Bills
2 min readMumbaiUpdated: Mar 26, 2026 12:17 PM IST
The Maharashtra government on Wednesday tabled an amendment bill in the Legislative Assembly to restore the Brihanmumbai Municipal Corporation’s (BMC) powers to levy and collect property tax with retrospective effect.
The move comes in the wake of adverse court rulings that had stalled revenue collection. Minister of State for Urban Development Madhuri Misal introduced the bill, which proposes amendments to the Mumbai Municipal Corporation Act to bring clarity and legal backing to provisions governing the fixation of the capital value of properties.
The BMC has been levying property tax based on the capital value system since April 1, 2010. As per existing norms, the municipal commissioner was authorised to frame rules for determining capital value, leading to the formulation of Capital Value Rules in 2010 and subsequent revisions in 2015. These rules were implemented retrospectively from 2010.
The Bombay High Court in 2019 and the Supreme Court in 2022 ruled that such rules could not be applied retrospectively, as the parent Act did not explicitly grant such powers to the commissioner. The courts also struck down key provisions, halting assessment and recovery of property taxes.
To address the situation, the proposed amendments seek to explicitly empower the commissioner to frame rules for determining capital value, including provisions for retrospective implementation. The bill also proposes re-enactment of the Capital Value Rules, 2010, with effect from April 1, 2010, and restoration of provisions enabling the levy and collection of property tax.
According to the government, revenue losses affected the civic body’s ability to provide essential services such as healthcare, water supply, education, transport, and housing. It also emphasised that property tax is the BMC’s main source of income.
The amendments were deemed necessary to address the legal hurdles highlighted by the courts and to prevent further revenue losses, ensuring the BMC can continue to discharge its constitutional responsibilities and maintain the city’s urban infrastructure.
