Chapter II OF THE LOCAL RATE ON LAND

1. (1) All land shall be subject to the payment The local of a rate, to be called the local rate, not exceeding one rate annual for every rupee of its annual value.
2. (2) The proportion which the local rate shall bear to the annual value of land shall, except as provided in sub-section (3), be fixed for each district by the Local Government by notification.
3. (3) The Local Government may, by notification, delegate to the district board, subject to such restrictions or conditions as it thinks fit, its powers under sub-section (2), and may, by notification, cancel or vary any such notification.

From such date as may be notified in respect of each district by the Local Government, all authorized rates and cesses for the maintenance of roads, schools and the district-post shall merge in and become part of the local rate, and no rate or cess other than the local rate shall be thereafter leviable for those purposes.

The landholder shall be liable for the local rate subject to the following provisos, namely:--

1. (1) where the landholder pays the land-revenue in kind to any assignee of revenue or any villageheadman, the assignee of revenue or village-headman shall be liable for the payment of the local rate instead of the landholder, and no demand shall be made by any such assignee or village-headman on the landholder in respect of the payment of the rate; and
2. (2) where the Government has, under any lease current at the time when this Act comes into force, paid the Focal rate on trini, it shall continue to pay the rate during the currency of the lease.

When a local rate is payable by a landholder in respect of lands held by a tenant with a right of occupancy holding at a favourable rent, the landholder may realize from the tenant a share of the rate, bearing the same proportion to the whole rate as the excess of the annual value over the rent paid by the tenant bears to half the annual value.

Four-fifths of the net proceeds of the local rate levied in each district, after deducting the expenses of collection, shall, except as provided in section 68, be allotted to the district board established for that district under this Act. The remaining one-fifth shall be carried to the credit of the Local Government, and may--

1. (a) be allotted by that Government to any district board established under this Act ; or
2. (b) be applied by that Government to provide in the territories to which this Act extends, or any part thereof, for any of the matters on which district boards may expend the funds at their disposal under this Act : Provided that the Local Government may direct that the whole or any portion of the net proceeds of the local rate levied within the limits of any municipality or military cantonment,. after deducting the expenses collection, shall be carried to the credit of the municipal fund, or made available for the purpose of public improvement in the cantonment or for carrying out therein any rules made under section 25 of the Cantonments Act, 1880 (III of 11880), as the case may be.