India, March 26 -- The state legislature on Wednesday passed a bill amending the Mumbai Municipal Corporation Act, 1888, allowing the civic administration to collect property tax arrears that will impact 1.05 million properties in Mumbai. Arrears had piled up for 16 years, as property owners were paying only 50% of the tax due to pending litigation.

The litigation arose when housing societies approached the Bombay High Court, challenging a 2012 decision of the Brihanmumbai Municipal Corporation (BMC) to levy property tax as per the capital value of buildings rather than the rental value (RV) system. In 2012, while calculating the tax as per capital value, the BMC had also said the new system would be applied with retrospective effect, fr...