Question

How do the municipalities get funds?

Answer 1

Municipalities get funds by imposing various taxes such as:

1. Octroi Duty— Tax on goods and animals brought into or taken out of the town.
2. House Tax — Tax on houses in the town. This tax is fixed by the municipality according to the annual rental value of the houses.
3. Water Tax — Tax as charges for providing clean water for drinking. People who have municipality taps in their houses have to pay it.
4. Profession Tax — Lawyers, doctors and other professionals pay profession tax on their annual income.
5. Income from Municipal Property — Tax paid as rent by the shopkeepers and traders selling goods in the markets.
6. Entertainment Tax — Tax collected from those who provide different kinds of entertainment, e.g., cinema halls. They also receive annual financial aids and grants from the state government.