Correct Option
The correct option is (c) 1 and 3 only.
Explanation
Municipal Corporations are established for the administration of big cities. To fund their operations and provide essential services, they are empowered to collect revenue through various taxes, user charges, and grants from the state government. The financial autonomy and revenue sources of these bodies are critical for urban governance.
Statement-wise Analysis
- Statement 1 is Correct: Property tax is a statutory tax levied on real estate, including land and buildings. It serves as one of the most significant sources of "own revenue" for Municipal Corporations in India.
- Statement 2 is Incorrect: While property tax is a major component of the revenue, it does not constitute 90% of the total earnings. According to standard administrative data and on Urban Administration, property taxes typically constitute approximately 25% to 30% of the money a Municipal Corporation earns. The remaining funds come from other taxes, fees, and government grants.
- Statement 3 is Correct: Municipal Corporations have the authority to levy taxes on various services and amenities. This includes taxes on education, water supply, and other amenities. Additionally, taxes or charges related to entertainment services (such as movie tickets or entertainment zones) fall under the purview of local revenue generation, although the structure has evolved with the introduction of GST.
Key Takeaway
Property tax is a primary source of own revenue for Municipal Corporations, typically accounting for 25-30% of earnings, not the vast majority. Municipalities also rely heavily on state government grants and other specific taxes like education and water taxes.