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Bengaluru's rollout of the digital e-khata system has brought hidden property tax liabilities into light. Around half a million properties were found to be underreported either by misclassifying commercial space as residential or understating built-up area leading to nearly INR 500 crore in recoveries. With over 5.5 lakh final e-khatas issued and draft versions for millions more, BBMP is sending notices and expects to recoup substantial sums yet to be assessed. This initiative builds on previous audits and is rapidly transforming tax transparency in the city.
Bengaluru's civic authorities have exposed one of the largest property tax evasion cases the city has seen in recent memory. The e-khata system launched late last year has revealed nearly five lakh properties that either understated their built-up area or registered commercial units as residential to reduce their taxes. As a result, the Bruhat Bengaluru Mahanagara Palike (BBMP) has already recovered approximately INR 500 crore and anticipates uncovering an equivalent amount in new dues as verification continues. Advertisement
The digital e-khata process requires property owners to submit Aadhaar, sale deeds, tax IDs, BESCOM details, and photos online. This system has helped BBMP cross verify actual usage and size against self-declared figures a crucial step that exposed the discrepancies. So far, more than 5.5 lakh properties have received final e-khatas, while draft versions for around 25 lakh are publicly available.
BBMP's 2024-25 records show that only 20 lakh out of roughly 25 lakh properties actually paid taxes. Of these, 3.5 lakh were defaulters split between long time non-payers and more recent delinquents missing around INR 390 crore in dues. In this financial year, BBMP has collected around INR 2,966 crore towards its INR 6,256 crore target. Officials believe having uncovered underpaid dues and misclassified properties, the e-khata mechanism could yield another INR 1,000 crore in settled taxes.
Building on its success, BBMP has begun issuing notices to about 5 lakh property owners identified for under assessment or evasion. These notices demand full payment of the taxes owed and serve as a deterrent for future misreporting. In a pilot audit covering 26,000 properties, BBMP uncovered INR 100 crore in leakage leading to immediate notices and preparation for broader field inspections.
This transparency push aligns with previous efforts. A few months ago, BBMP flagged 54,000 properties holding questionable "A-khata" certificates and moved to annul fraudulent documents. That initiative also calls for thorough resubmission of legal paperwork before khatas can be reinstated.
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