UP Draft Property Tax Rules Offer Relief To Micro And Small Enterprises

Lucknow, Jul 15 (KNN) The Uttar Pradesh government has proposed a major property tax relief for the state's micro and small enterprises (MSEs) by bringing them under the same property tax category as residential buildings.

Draft Rules Propose Lower Property Tax For MSEs

The state has issued the draft Uttar Pradesh Municipal Corporation (Property Tax) (Fifth Amendment) Rules, 2026, inviting objections and suggestions from the public and stakeholders within 30 days.

Under the proposed amendment, micro and small industrial units, as defined by the state's Industrial Development Department, will no longer be taxed at commercial rates, which are currently three times higher than residential property tax. 

The move is expected to reduce the tax burden on small industrial units and improve their financial sustainability.

Existing Rates To Continue For Larger Entities

However, the existing property tax structure will continue for medium and large industries, which will remain liable to pay tax at three times the residential rate.

The higher tax rate will also continue to apply to star-category hotels, resorts, eligible tourism establishments registered with the Uttar Pradesh Tourism Department, as well as offices of government departments, semi-government organisations and public sector undertakings.

Government Invites Public Feedback

The Urban Development Department has invited stakeholders to submit objections and suggestions to the Principal Secretary, Urban Development, within the stipulated 30-day period. Representations received after the deadline will not be considered.

Cabinet Approval To Follow Consultation

Following the consultation process, the proposed amendment will be placed before the state Cabinet for approval. Once notified, the revised property tax regime will be implemented across all municipal corporation areas in Uttar Pradesh.

(KNN Bureau)