Gram panchayats achieve 71.39% tax collection; Karnataka tops country in revenue mobilisation

Gram panchayats in Karnataka have achieved 71.39% tax collection for the financial year 2025-26 as of February 18 and with this, the State has recorded the highest tax collection in the country in 2024-25, according to the Rural Development and Panchayat Raj Department.

In a statement, Rural Development and Panchayat Raj and IT/BT Minister Priyank Kharge said the steady rise in demand and recovery over the past five years had placed Karnataka at the top in terms of tax mobilisation by gram panchayats.

“Over the last five years, the tax demand has doubled and the collection amount has also increased significantly. In 2024-25, Karnataka recorded the highest tax collection in the country,” Mr. Kharge said.

Tax arrears recovery

He pointed out that the balance for the current financial year would be recovered by the end of March 2026. Tax arrears from previous years stood at ₹3,352.4 crore, and recovery was under way after segregating dues based on property classification, he said.

Chief Executive Officers of all Zilla Panchayats have been directed to conduct focused tax collection drives. Awareness campaigns are being carried out through information, education and communication activities and social media platforms apart from print media.

Special drives

In Vijayanagar district, a special drive across 137 gram panchayats resulted in the collection of ₹3.07 crore. In Yadgir district, a one-day property tax campaign across 122 gram panchayats collected ₹3.12 crore, the Minister said.

To facilitate payments, property owners can pay taxes through PhonePe, Google Pay and at Bapuji Seva Kendras. Details of payable property tax are available on the Panchamitra software platform.

Mr. Kharge said gram panchayats were providing civic amenities such as drinking water, streetlights, roads and drainage even in areas where land conversion had not been formally undertaken, placing a financial burden on local bodies. The amendments to Section 199 of the Karnataka Gram Swaraj and Panchayat Raj Act, 1993- introducing Sections 199B and 199C- were notified on April 7, 2025.

The Karnataka Gram Swaraj and Panchayat Raj (Gram Panchayat Taxes, Rates and Fees) Rules, 2025 came into effect on October 17, 2025, with the objective of strengthening the own-source revenue of gram panchayats.

The Minister said certain technical issues following modifications to the e-Swathu 2.0 software were being addressed. Increased tax mobilisation would enhance the financial capacity of gram panchayats and support the creation of basic infrastructure in rural areas, he added.