New Delhi, March 2026 – The New Delhi Municipal Council is moving to replace its long-standing ratable value system with the Unit Area Method for property tax assessment, a structural reform that could reduce tax liability by 30% to 50% for older and self-occupied properties within its jurisdiction. NDMC Vice-Chairperson Kuljeet Singh Chahal confirmed the direction of the reform following a consultation with traders from the Connaught Place business district, stating that the age factor built into the Unit Area Method would provide automatic relief to long-standing property owners and that self-assessment with online payment would simplify the compliance process significantly.
What Changes Under the Unit Area Method
The Unit Area Method calculates property tax based on the built-up area of a property multiplied by a per-square-foot rate that varies by zone, use type, and age of construction rather than estimating annual rental value under the older ratable system. The shift allows bifurcated assessment of properties with mixed use, such as a building where part is used as a retail shop and part as storage, enabling more granular and defensible tax computation. The maximum applicable tax rate is also proposed to be reduced from the current 30% to 20% under the new framework.
Traders Raise Concerns Over Parity and Coercive Enforcement
While welcoming the structural relief, traders at the consultation raised concerns over the continued disparity between NDMC and MCD tax rates for comparable commercial properties across Delhi. Atul Bhargava, President of the New Delhi Traders Association, called for a “one city, one tax” approach, arguing that businesses in Connaught Place and adjacent NDMC areas should not face materially different tax burdens than those operating under the Municipal Corporation of Delhi. Objections were also raised against coercive enforcement practices, including demands made without prior notice or opportunity to respond.
Location Context: NDMC’s Jurisdiction and Its Commercial Significance
NDMC governs approximately 42.7 square kilometres of central Delhi, covering Connaught Place, Chanakyapuri, Lodhi Estate, and parts of New Delhi district. The area is home to India’s highest concentration of foreign diplomatic missions, luxury retail, and government-linked commercial real estate. Property tax rationalisation in this zone has direct implications for commercial lease costs and rental yields in one of India’s most sought-after business addresses.
