NA tax finally abolished, to push redevelopment & regularisation of aging housing societies

Pune/Mumbai: State revenue minister Chandrashekhar Bawankule on Wednesday said non-agricultural (NA) tax has been permanently abolished under the direction of CM Devendra Fadnavis. The reform comes nearly one-and-a-half years after it was first proposed and is expected to accelerate redevelopment and regularisation of aging housing societies in major cities like Pune, Mumbai and Thane.The notification, issued late on Tuesday, amends the Maharashtra Land Revenue Code to eliminate the annual NA tax, as well as the requirement for a separate non-agricultural land-use permission from district collector. "This is applicable provided the proposed land use is permissible under the applicable development plan, regional plan or development control regulations," an official said.
Suhas Patwardhan, president of the Maharashtra State Cooperative and Apartment Association, said the outdated British-era law should have been scrapped long ago. "The issue was kept pending across four different govts. We had also demanded that the steep hike in this tax over the past two decades, along with penalties and interest, be waived. A petition was filed in the high court in this regard. We will now take an appropriate decision post this GR," he said.Advocate Shreeprasad Parab, expert director of the Maharashtra State Cooperative Housing Federation Ltd, said the reform resolved long-standing concerns, including inconsistencies between similarly placed urban areas. "The graded and rational one-time premium structure safeguards public revenue while freeing housing societies and landowners from recurring and often disputed revenue demands. This is not just a fiscal change, it is a structural correction that restores fairness and certainty, benefiting lakhs of citizens," he said.Advocate Satya Muley said the amendment stemmed from a PIL seeking exemption for urban areas. "From now on, no collector approval will be needed for NA conversion if the land lies within a development plan or regional plan and is already designated for non-agricultural use under the sanctioned DP/RP or the applicable development control rules," he said.Muley said development authorities could now directly grant development permissions on such lands, and municipal corporations would be responsible for updating land-revenue records. A one-time premium would apply at the stage of building-plan approval, he said.Under the revised framework, once the planning authority grants development permission, no separate NA clearance or recurring assessment under the Land Revenue Code will be required. The annual NA tax is replaced with a structured, one-time conversion premium, ending the dual control of revenue and planning departments and improving transparency in land administration.Muley, however, raised concerns about provisions allowing recovery from landholders whose lands were converted to NA use in 2001-02. "A one-time premium will be levied on lands converted within the past 25 years — 0.10% of ready reckoner rates for plots up to 1,000sqm, 0.25% for 1,000-4,000sqm, and 0.50% for plots above 4,000sqm. This arbitrary provision will cause injustice to many landholders. We have urged govt to withdraw it, and if not, we will challenge it in the HC," Muley said.Further, no sanad (conversion certificate) was required. "Landowners no longer require this certificate for bank loans, property transactions or other legal purposes. These measures are expected to boost real estate and industrial activities, resolve legacy issues for plot owners including those in gunthewari and small parcel areas, enhance transparency through digital integration and discard British era law," Bawankule said.