<p>Amid the increasing importance of urbanization, the Urban Local Governments (ULGs) in India, especially those of large cities, face a mounting challenge of providing civic infrastructure services. As the ULGs in India face multiple challenges due to limited revenue sources, expanded functions and fiscal burden, they need to exploit the potential of their own revenue sources towards mobilizing fiscal resources for urban civic service delivery. Property tax is an important own revenue source of the ULGs that requires particular attention. This paper analyses the current status, performance and improvement potential of the property tax revenue of the ULGs of two large Indian cities—Hyderabad and Pune. It first makes a comparative analysis of the features of property taxation systems of the study cities to identify positive features as well as to&#xa0;draw shortcomings. A comparative assessment of the property tax revenue performance of the ULGs is made subsequently. Finally, the potential of property tax revenue mobilization in the study cities is estimated in a few scenarios. The results imply the scope for improving the ULG tax revenue through reforms in property tax policy and administration, which apply to other Indian cities as well.</p>