Exactly a year after announcing the abolition of the age-old Non-Agricultural (NA) tax, the Mahayuti government has fulfilled its promise by approving a draft ordinance, which will become law once ratified by the state legislature.
The move marks a major reform in Maharashtra’s land development policy, aimed at simplifying procedures and reducing bureaucratic hurdles.
Ordinance to Take Effect After Governor’s Approval
The decision to abolish the NA tax and the requirement for NA permission was first announced in October 2024, ahead of the Maharashtra Assembly elections.
The draft ordinance, approved by the state cabinet on Tuesday, will now be sent to the Governor for approval, after which it will be promulgated to begin implementation.
Developers to Approach Local Planning Authorities Directly
Once the ordinance comes into effect, citizens or institutions wishing to develop land parcels can directly submit proposals to the local planning authority instead of approaching the district collector for NA permission.
At present, applicants must seek approval from revenue authorities, a process that has long been criticized for causing delays and red tape.
Sanad System Abolished to Reduce Duplication
The state cabinet has also decided to eliminate the Sanad system, which required references to the Revenue Department even in cases where NA permission was not needed.
Under Sections 42(a), (b), (c), and 44-A of the Maharashtra Land Revenue Code, 1966, NA permission was not mandatory, but obtaining a deemed Sanad often took as long as securing permission itself.
To avoid duplication and expedite approvals, the cabinet has decided to abolish this requirement altogether.
One-Time Premium Replaces Annual NA Tax
While abolishing the NA tax regime, the government has decided to levy a one-time premium based on Ready Reckoner (RR) valuation.
For plots up to 1,000 sq. mtr – 0.10% premium
For plots between 1,001–4,000 sq. mtr – 0.25% premium
For plots above 4,001 sq. mtr – 0.50% premium
The Revenue Department clarified that the premium will be collected once, replacing the annual NA tax.
Premium to Be Calculated Based on RR Valuation Year
For properties with NA permission granted on or before December 31, 2001, the one-time premium will be based on the RR valuation for the year 2001.
For permissions granted on or after January 1, 2002, the premium will be calculated based on the RR valuation applicable on the date the building permission was issued.
No Recovery of Arrears Until Amendments Take Effect
The Revenue Department has clarified that NA tax arrears will not be recovered until the necessary amendments to the concerned Act are made, providing interim relief to landowners and developers.
