December 22, 2025: The Brihanmumbai Municipal Corporation’s (BMC) property tax assessment has come under renewed scrutiny after civic records revealed pending dues of nearly Rs 10,899 crore from 481 properties across Mumbai, calculated using a disputed formula that has already been struck down by the Bombay High Court and upheld by the Supreme Court.
The issue came to light earlier this year when residents of Annavista Cooperative Housing Society in Bandra received a notice demanding Rs 35.23 lakh in alleged arrears—almost 20 times their usual annual tax. The BMC warned of coercive measures, including attachment and auction of the property, if payment was not made within 21 days. The residents responded that their actual tax liability for the year was Rs 1.73 lakh and urged the civic body to withdraw the notice.
Similar notices have been issued to hundreds of properties. According to BMC data, as of August 2025, outstanding dues—including penalties—stand at Rs 10,899.96 crore. The spike traces back to a property tax methodology introduced in 2010, based on potential Floor Space Index (FSI) and the Capital Value System (CVS). The Bombay High Court quashed this method in 2019, a decision upheld by the Supreme Court in 2022.
Despite this, the BMC has continued issuing bills using a hybrid calculation—100% tax based on the old rateable value plus 50% of the proposed CVS value—describing them as being issued “on a protective basis.”
“We wrote to the BMC immediately after the receipt of the notice, pointing out that they had sent an inflated bill. We are well aware of the court’s ruling that came in 2022, and have been paying taxes accordingly,” said Cornell Gonsalves, a resident of Annavista CHS.
BMC Commissioner Bhushan Gagrani acknowledged concerns over the current approach. “In my opinion, the property tax of any property on a land parcel should be determined on the base value of the land. The SC questioned BMC’s method of calculating the property tax on a land parcel and I am already carrying out correspondence with the state government to formulate a proper GR that would determine a permanent establish policy to calculate the property tax rates,” he said.
Gagrani added that no review petition was filed against the Supreme Court order and that if penalties were removed and a revised base-value policy adopted, only 25–30% of the pending amount would remain payable.
Former corporators have termed the current billing practice arbitrary. “The current property tax bills are being generated in an ad-hoc manner and the BMC’s footnote justifies that. This case is a direct contempt of the court,” said Asif Zakaria.
Meanwhile, the BMC reported collecting Rs 6,172 crore—nearly 99.5% of its target—for 2024–25, marking a sharp rise from the previous year, even as the controversy over its tax formula continues.
