In one of the biggest relief measures for municipal tax defaulters, the Uttar Pradesh government has announced to launch a four-month one-time settlement (OTS) scheme, running from August 15 to December 15, to help property owners clear pending house tax, water tax and sewer tax dues without paying interest or surcharge.
Details
The scheme will be implemented across all 762 urban local bodies, including 17 municipal corporations, 200 municipal councils and 545 nagar panchayats. It covers pending house tax, water tax and sewer tax dues outstanding up to April 1, 2026, for residential, commercial and mixed-use properties, besides government, autonomous body and public sector properties.
Under the scheme, taxpayers will only have to pay the outstanding principal amount, with the entire interest and surcharge waived if dues are cleared within the stipulated period.
To ease the financial burden, the government has also allowed payment of the principal amount in up to three instalments. Beneficiaries must deposit one-third of the dues within 30 days of approval and clear the remaining amount in two monthly instalments. The entire payment, however, must be completed within three months to retain the benefit.
Director, Urban Development, Anuj Jha said the scheme is expected to help thousands of residents clear years of accumulated tax arrears without paying hefty interest while enabling urban local bodies to improve their financial health and recover long-pending revenue. Officials expect the drive to generate more than ₹1,500 crore in revenue.
Municipal bodies depend heavily on property tax collections to fund civic services such as road maintenance, street lighting, sanitation, drainage and water supply. Officials said the scheme is also expected to improve tax compliance, reduce long-pending property tax disputes and strengthen the finances of urban local bodies.
Applications can be submitted until November 14, while all cases must be processed and settled by December 15. Authorities have been instructed to dispose of applications within 15 days.
Principal Secretary, urban development, P Guruprasad described the OTS as a one-time opportunity for defaulters to regularise their property tax records. He said strict recovery proceedings would begin after the scheme closes against those who fail to avail of the benefit. Officials have also been warned that delays in processing applications or implementing the scheme within the prescribed timelines will invite accountability and disciplinary action.
