Lucknow: The Uttar Pradesh government has announced a major relief measure for property tax defaulters by introducing a One-Time Settlement (OTS) Scheme that will waive 100% of the interest and surcharge on outstanding property-related taxes upon payment of the principal amount.
The scheme, which will be implemented for the first time across all 762 urban local bodies in the state, is aimed at increasing revenue collection, reducing long-pending tax disputes, and providing financial relief to taxpayers.
Principal Secretary, Urban Development, P. Guru Prasad, has issued directions to all Municipal Commissioners, Executive Officers of Municipal Councils, and Nagar Panchayats regarding the implementation of the scheme.
The OTS will be applicable under the provisions of the Uttar Pradesh Municipal Corporation Act, 1959, and the Uttar Pradesh Municipalities Act, 1916. It will cover all 17 Municipal Corporations, 200 Municipal Councils, and 545 Nagar Panchayats across the state.
Under the scheme, taxpayers with pending house tax, water tax, and sewer tax dues will be required to pay only the outstanding principal amount. In return, the government will grant a complete waiver of the accumulated interest and surcharge, provided the entire principal liability is cleared.
The benefit will be available for tax arrears pending up to April 1, 2026, and will apply to residential, commercial, and mixed-use properties. The scheme will also be open to individual taxpayers, government departments, autonomous bodies, and public sector undertakings (PSUs).
To ease the financial burden on taxpayers, the government has allowed payment in up to three instalments. Applicants must deposit at least one-third of the principal outstanding within 30 days of joining the scheme, while the remaining amount can be paid in two equal monthly instalments. The entire payment must be completed within three months.
The OTS Scheme will remain operational from August 15 to December 15, 2026. During the first month, from August 15 to September 14, urban local bodies will conduct an extensive public awareness campaign to inform eligible taxpayers about the initiative.
Applications may be submitted through both online and offline modes. Urban local bodies will accept applications via their official websites or dedicated portals, while help desks will also be established to assist applicants. Authorities have been directed to dispose of applications within 15 days of receipt.
The Urban Development Department has instructed local bodies to publicise the scheme through emails, SMS alerts, letters, hoardings, public camps, awareness meetings, and electronic media to maximise participation.
The government has also clarified that taxpayers who have already paid their dues, either partially or in full, before the commencement of the scheme will not be eligible for any refund.
Officials have been warned that delays in processing applications or failure to implement the scheme effectively will attract accountability and administrative action. The implementation of the OTS programme will be monitored through weekly and fortnightly reviews to ensure timely execution across the state.
