TL;DR — Key Takeaways
- Maharashtra has replaced the recurring annual non-agricultural (NA) assessment with a one-time premium on conversion, under a substituted Section 47 of the Maharashtra Land Revenue Code, 1966.
- The change comes through the Maharashtra Land Revenue Code (Second Amendment) Act, 2025, in force from 31 December 2025, with an implementing Government Resolution dated 10 February 2026.
- The one-time premium is 0.10% / 0.25% / 0.50% of the Annual Statement of Rates (ASR) market value, by plot size.
- Where the intended use is already permissible under the Development Plan or Regional Plan, a separate NA permission (sanad) from the Collector is no longer required.
- The reform does not convert Occupancy Class II or restricted-tenure land into Class I — tenure conditions still apply separately.
What are Maharashtra’s new NA conversion rules in 2026?
Direct answer: From 31 December 2025, Maharashtra charges a single one-time premium when agricultural land is put to non-agricultural use, instead of the old annual NA assessment that landowners paid year after year. The switch was made by the Maharashtra Land Revenue Code (Second Amendment) Act, 2025, which substituted Section 47 of the Maharashtra Land Revenue Code, 1966 (MLRC), and is being rolled out through a Government Resolution of the Revenue and Forest Department dated 10 February 2026.
For plotted-land buyers and investors across the Mumbai Metropolitan Region (MMR) and the rest of Maharashtra, this is one of the most consequential land-revenue reforms in years. It changes how NA cost is calculated, when it is paid, and whether you need a separate Collector permission at all. It does not, however, erase the older tenure and industrial-use rules that still decide whether you can buy a particular parcel in the first place.
Before vs after: recurring NA assessment vs the one-time premium
The clearest way to understand the reform is a side-by-side of the old regime and the new one.
| Feature | Before (until 30 Dec 2025) | After (MLRC Second Amendment Act, 2025) |
|---|---|---|
| NA charge type | Recurring annual non-agricultural assessment | One-time premium at conversion |
| Basis of charge | Periodic assessment rates set by revenue authorities | Percentage of ASR market value, by plot area |
| Separate NA permission (sanad) | Required from the Collector before use | Not required where the use is permissible under the Development Plan / Regional Plan |
| Ongoing liability | Continued every year the land stayed NA | None after the one-time premium is paid |
In short: the state has moved from taxing NA land repeatedly to charging once, and it has folded the fiscal step into the planning-permission process rather than keeping it as a separate revenue hurdle.
How much is the one-time NA premium?
Direct answer: The one-time premium is a percentage of the land’s market value as per the Annual Statement of Rates (ASR) published under the Maharashtra Stamp (Determination of True Market Value of Property) Rules, 1995 — and the percentage rises with plot size.
| Plot area | One-time premium (of ASR market value) |
|---|---|
| Up to 1,000 sq. m. | 0.10% |
| 1,001 to 4,000 sq. m. | 0.25% |
| Above 4,000 sq. m. | 0.50% |
Notably, the amended Section 47 does not set different premium rates for Occupancy Class I land versus other classes of occupancy — the rate depends on the area of the plot, not its tenure category. For land already converted before the amendment, the law provides a transitional one-time premium in lieu of the annual assessment, calculated on the ASR of 2001 (for conversions on or before 31 December 2001) or of the year of conversion (for conversions on or after 1 January 2002).
Do you still need a separate NA permission from the Collector?
Direct answer: In most planned areas, no. Where a parcel falls within a sanctioned Development Plan or Regional Plan and the proposed use is permissible there, the amendment dispenses with the earlier requirement of a separate NA permission (sanad) from the Collector. The one-time premium is instead collected before the planning authority grants development permission — integrating the fiscal step into the building-permission workflow.
This is the practical heart of the “ease of doing business” pitch behind the reform: fewer desks, one payment, and development permission that no longer waits on a second, standalone conversion order.
Occupancy Class I vs Class II: what has NOT changed
Direct answer: The premium reform is about NA cost and process — it does not upgrade your tenure. Granting development permission does not, by itself, convert non-Class I land into Class I occupancy, and the restrictions attached to Class II or other restricted-tenure land continue to operate independently.
- Occupancy Class I — effectively freehold; the holder has full transfer rights, and NA use follows the new one-time-premium route directly.
- Occupancy Class II / restricted tenure — land granted on restricted terms (for example, certain government-allotted, tenancy-derived or Bhogvata-2 lands). These carry their own conditions, and any required no-objection or separate premium payable to the government for tenure purposes is not waived by the NA reform.
The takeaway for buyers: the new premium simplifies NA, but you must still read the 7/12 extract, the tenure class and any conditions endorsed on it. Our 12 red flags to check before you buy a plot in MMR covers exactly these title-and-tenure checks.
Where does the MTAL Act fit in?
The Maharashtra Tenancy and Agricultural Lands Act, 1948 (MTAL) governs who may buy agricultural land and on what terms — a separate question from how NA cost is charged under the MLRC. Two long-standing MTAL rules still matter alongside the 2025 reform:
- Bona fide industrial use (Section 63-1A): a non-agriculturist may purchase agricultural land for a bona fide industrial use, subject to putting the land to that use within a fixed period (with a limited extension available on payment of a cess), failing which the concession can be lost.
- Agriculturist restriction (Section 63): the general bar on transfer of agricultural land to a non-agriculturist without permission continues to apply outside the specific industrial-use and planning-area routes.
In other words, the MLRC change lowers the NA cost and paperwork; the MTAL Act still decides eligibility to buy. Treat them as two gates, not one. Both were consolidated in the official MTAL text as updated to 27 November 2025 on the Maharashtra Law and Judiciary Department portal.
What happens if the one-time premium is not paid?
Direct answer: Where a premium (including the regularisation premium for previously converted land) is not paid within the prescribed period — one year in the regularisation route — it becomes recoverable with penalty and interest, as arrears of land revenue, and any waiver benefit tied to timely payment is forfeited.
We have seen commentary suggesting steep multiples for non-compliance. We have not found a specific, verifiable “five times the premium” figure in the primary Act text or the 10 February 2026 GR, so we do not state one here. What is confirmed is the recovery-as-arrears mechanism and loss of waiver — treat the one-year clock as real and do not miss it.
Step-by-step: NA use under the 2026 regime
- Confirm the plan status. Check whether the parcel is inside a sanctioned Development Plan or Regional Plan and whether your intended use is permissible there.
- Verify tenure. Read the 7/12 extract for Occupancy Class (I vs II) and any endorsed conditions; resolve Class II / restricted-tenure requirements separately.
- Clear MTAL eligibility. Confirm you are entitled to buy — via agriculturist status, the industrial-use route, or the applicable planning-area exemption.
- Compute the premium. Apply 0.10% / 0.25% / 0.50% of ASR market value by plot area.
- Pay before permission. The one-time premium is collected ahead of the planning authority’s development permission.
- Keep the record. Retain proof of payment and the permission; watch the one-year clock on any regularisation premium.
“For two decades, annual NA assessment was a quiet, recurring drag on land ownership in Maharashtra. Moving to a one-time premium and folding it into development permission is a genuine simplification — but it rewards diligence, not shortcuts. The tenure class and the MTAL eligibility gate still decide whether a parcel is even buyable. At THE EDGE Developments we underwrite both before we call a plot investable.”
Because the premium is pegged to ASR market value, it also interacts with your total acquisition cost — read it alongside our 2026 breakdown of stamp duty and registration charges on land in Maharashtra. And if you are buying in the NAINA belt, where large tracts are converting to planned use, see Third Mumbai and NAINA explained for how the airport city is resetting land values.
Frequently asked questions
What is the new one-time NA premium in Maharashtra
It is a single, upfront charge payable when agricultural land is put to non-agricultural use, introduced by the Maharashtra Land Revenue Code (Second Amendment) Act, 2025. It replaces the earlier annual NA assessment and is set at 0.10%, 0.25% or 0.50% of the ASR market value depending on plot size.
When did the MLRC Second Amendment Act 2025 take effect
The Act received the Governor’s assent and came into force on 31 December 2025. An implementing Government Resolution of the Revenue and Forest Department, dated 10 February 2026, sets out how the new one-time premium and permission process operate in practice.
Do I still need a separate NA permission or sanad from the Collector
In most cases, no. Where the land falls within a sanctioned Development Plan or Regional Plan and the intended use is permissible there, a separate NA permission from the Collector is no longer required. The one-time premium is collected before the planning authority grants development permission.
Does the new rule apply to Occupancy Class II or restricted-tenure land
The premium reform applies to NA use, but it does not upgrade tenure. Development permission does not convert non-Class I land into Class I, and Class II or restricted-tenure conditions — including any separate no-objection or tenure premium — continue to apply independently.
What happens if the one-time premium is not paid on time
An unpaid premium is recoverable with penalty and interest as arrears of land revenue, and any waiver linked to timely payment is lost. In the regularisation route for previously converted land, the prescribed window is one year, so the clock should not be missed.
Buying plotted land in MMR or Maharashtra?
THE EDGE Developments underwrites tenure class, MTAL eligibility and NA premium exposure before we call a plot investable. Talk to our Land Intelligence team before you commit.
Related reading
- Stamp duty and registration charges on land in Maharashtra (2026)
- 12 red flags to check before you buy a plot in MMR
- Third Mumbai and NAINA explained: how the new airport city will reset land values
Disclaimer: This article is for general information only and is not legal or tax advice. Land-revenue rules, premium rates and tenure conditions vary by parcel and are subject to change; the Maharashtra Land Revenue Code (Second Amendment) Act, 2025 and the Government Resolution dated 10 February 2026 should be read in full, and specific parcels verified against the 7/12 extract and Collector records. Consult a qualified advocate and your local revenue office before transacting. Verified against sources current to August 2026.
Citations & sources
- Mondaq — “Maharashtra Abolishes Annual Non-Agricultural Tax: Transition To One-Time Premium Model Under The Maharashtra Land Revenue Code (Second Amendment) Act, 2025”: read here.
- Law Web — “New NA Permission Regime in Maharashtra: What the 2025 MLRC Amendment and 10 February 2026 GR Mean for Landowners”: read here.
- EQ Magazine — “Maharashtra Land Revenue Code (Second Amendment) Act, 2025: Streamlining non-agricultural land conversion”: read here.
- Maharashtra Law & Judiciary Department — official text, “The Maharashtra Tenancy and Agricultural Lands Act (as on 27 November 2025)”: read here.
- India Code — “Maharashtra Tenancy and Agricultural Lands Act” (primary statute): read here.
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