Mumbaikars may soon have to spend more on paying taxes – the civic body has proposed a sewage tax for those not paying property taxes, and a hike in water tax by 6-7 per cent.

From next year, over 50,000 homes in Mumbai are likely to be imposed a sewage charge as the Brihanmumbai Municipal Corporation (BMC) has proposed introduction of a new sewage tax to housing units smaller than 500 square feet.

The BMC’s move is aimed at shoring up its revenues – it is set to generate the civic body an annual revenue close to Rs 90 crore-Rs 100 crore.

Usually, the sewage tax component is included in the overall property tax that is levied on residential and commercial establishments.

However, in 2022 during the Maha Vikas Aghadi (MVA) government, the civic administration had waived property tax in any housing units that are smaller than 500 square feet. Therefore, civic officials have now decided to impose a sewage charge on these houses.

“Even though these houses don’t pay property tax, they have dedicated sewage and water lines. We are already charging a water tax on these houses, and since each housing unit generates sewage therefore a separate tax will be levied on them for operation and management of sewage lines,” a civic official said.

The civic officials said that the BMC had initiated a survey to identify these unmetered properties when it was found that as many as 54,226 residential properties that are smaller than 500 square feet will be brought under this new tax component. The tax is likely to come into effect from the next financial year starting from April 2027.

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“The tax amount will be calculated on the basis of ready reckoner rates. At present the work on calculating the rates and setting up the formulae is underway, after which the proposal will be sent to the standing committee,” the official said.

Meanwhile, leaders from the opposing parties in the BMC said that they will oppose any new proposal that would involve the imposition of a new tax rate. “The present ruling administration only knows about burdening the citizens’ shoulders with tax rates,” Kishori Pednekar, Sena (UBT) corporator and leader of opposition (LoP) in the BMC told .

The proposal comes in the backdrop of the BMC’s revenue recording a steep decline. Its overall fixed deposit rate stood at Rs 91,690 crore on 2021-22 which came down to Rs 79,498 crore in 2024-25. In addition to this, the BMC has taken up infrastructure work amounting to Rs 2.5 lakh crore – which is three times the BMC’s reserves.

BMC proposes to hike water tax


For the first time since 2022, the civic administration is also set to table a proposal to hike water tax by 7-8 per cent.


Last time, when a similar proposal was tabled in November 2023, it was deferred following the instruction of then chief minister Eknath Shinde.

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“This proposal of hiking the water tax rates is nothing new. It was tabled and approved in 2022, when the previous Shiv Sena (undivided) led regime was there in BMC. Now that same proposal will be brought into the civic house for clearance,” Ganesh Khankar, leader of the house and BJP corporator told the .

At present, BMC charges Rs 6 for every 1,000 litres of water for residential usage and Rs 50 for every 1,000 litres of water for commercial and industrial usage. In 2022, the civic authorities increased water charges by 7.12%, before that in 2021, water charges were increased by 5.29%. The BMC generates an annual revenue of Rs 2,100 crore through water charges and it aims to increase it by Rs 200 crore by hiking the fees.

“The water charges haven’t been increased in the last four years, at present, Mumbai’s water demand is increasing and the overall supply network is also being expanded. Therefore, there is a need to hike the tax rates to match up the maintenance charges,” an official told the .