PUNE | MUMBAI: State revenue minister Chandrashekhar Bawankule announced on Wednesday that the non-agricultural (NA) tax has been permanently eliminated, following directives from CM Devendra Fadnavis. This reform comes approximately a year and a half after its initial proposal and is poised to facilitate the redevelopment and regularization of aging housing societies in major urban areas like Pune, Mumbai, and Thane.
The notification, issued late Tuesday, revises the Maharashtra Land Revenue Code to abolish the annual NA tax and the necessity for a separate non-agricultural land-use permit from the district collector. “This applies as long as the proposed land use conforms to the relevant development plan, regional plan, or development control regulations,” an official explained.
Suhas Patwardhan, president of the Maharashtra State Cooperative and Apartment Association, stated that this outdated British-era law should have been repealed years ago. “The issue was postponed through four different administrations. We previously sought to waive the steep tax hikes from the last two decades, along with associated penalties and interest, even filing a petition in the high court. We will make an informed decision following this GR,” he commented.
Advocate Shreeprasad Parab, expert director of the Maharashtra State Cooperative Housing Federation Ltd, expressed that this reform addresses longstanding issues, including discrepancies across urban areas. “The newly structured one-time premium model protects public revenue while liberating housing societies and landowners from frequent and often contentious revenue demands. This is not merely a fiscal change; it’s a structural adjustment that reinstates fairness and confidence, benefiting countless citizens,” he added.
Advocate Satya Muley noted that the amendment originated from a public interest litigation (PIL) advocating for exemptions in urban zones. “Moving forward, collector approval will not be necessary for NA conversion if the land is encompassed within a development or regional plan and designated for non-agricultural use,” he explained.
Additionally, Muley indicated that development authorities can now directly provide development permissions for such lands, with municipal corporations tasked with updating land-revenue records. A one-time premium will be applicable at the building plan approval stage.
Under this revised framework, once development permission is granted, no further NA clearance or ongoing assessment under the Land Revenue Code will be necessary. The annual NA tax will be substituted with a structured one-time conversion premium, removing the overlapping controls of revenue and planning departments, thus enhancing transparency in land management.
However, Muley raised concerns regarding provisions for recovering costs from landholders whose properties were converted for NA use in 2001-02. “A one-time premium will be imposed on lands converted in the last 25 years — 0.10% for plots up to 1,000sqm, 0.25% for 1,000-4,000sqm, and 0.50% for plots exceeding 4,000sqm. This arbitrary rule could lead to unfair treatment for many landowners. We have urged the government to retract this provision, and if not, we will challenge it in the High Court,” he stated.
Moreover, no sanad (conversion certificate) will be required, meaning landowners will no longer need this certificate for bank loans, property transactions, or other legal matters. These changes are intended to stimulate real estate and industrial activity, address legacy issues for plot owners, promote transparency via digital integration, and eliminate antiquated British-era laws, according to Bawankule.
