What the 2025 MLRC Amendment and 10 February 2026 GR Mean for Landowners?

Under the unamended Maharashtra Land Revenue Code, 1966 (MLRC), a landholder who wanted to change land use from agricultural to NA typically had to:

• Obtain development permission or building plan approval from the Planning Authority under the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act), and

• Separately seek NA permission from the Collector, obtain an NA sanad and thereafter pay conversion charges plus annual NA assessment (NA tax).

Even after construction, land in NA use attracted annual NA assessment under sections 47, 47A and Chapter VII of the MLRC, while the building itself was liable for property tax to the municipal body or gram panchayat. This created a “dual tax” burden – NA tax to the Revenue Department and property tax to the local body – which had been widely criticised by stakeholders.

Legislative Reform: The Maharashtra Land Revenue Code (Second Amendment) Act, 2025

To simplify procedure and remove duplication, the State Legislature enacted the Maharashtra Land Revenue Code (Second Amendment) Act, 2025, notified on 31 December 2025.[

Key amendments include:

• Deletion of the earlier cluster of provisions on NA permission and NA assessment (sections 42, 42A–42D, 44, 44A, 45, 46, Chapter VII and section 47A).

• Insertion of a new section 42, which ties the need for NA permission directly to what is permissible under the Development Plan / Regional Plan and development control regulations.

• Substitution of section 47 to introduce a one‑time “premium for non‑agricultural use of land” in place of recurring NA assessment, with rates linked to the Annual Statement of Rates (Ready Reckoner).

The GR dated 10 February 2026 operationalises these statutory changes by issuing detailed directions to Collectors, planning authorities, treasuries and local bodies.

No Separate NA Permission from Collector in Planning Authority Areas

The single most important change is that in areas where a Development Plan (DP) or Regional Plan (RP) exists, and where the proposed NA use is permissible under that plan or under the applicable Development Control Regulations (DCR), a separate NA permission from the Collector is no longer required.

New section 42 now provides that:

• If the intended NA use is permissible under the draft or final DP/RP, DCR or other instruments under the MRTP Act, then:

  • No permission of the Collector is required for change of land use from agricultural to NA.

  • The Planning Authority may grant development permission or approve building plans on such land.

The GR reiterates that, in such cases, the earlier requirement of a distinct NA order and NA sanad under the MLRC stands dispensed with.

Single‑Window System: Planning Authority as Nodal Agency

The GR formalises a single‑window system centred on the Planning Authority in MRTP areas:

• Landholders must apply directly to the Planning Authority notified under section 18 of the MRTP Act for:

  • Development permission, and/or

  • Building plan approval.

• This applies whether the land is recorded as Occupant Class I (Class I) or Occupant Class II (Class II); however, as discussed later, tenure restrictions on Class II lands still operate.

Mode of Application

Applications can be submitted:

• Online, through:

  • Building Permission Management System (BPMS),

  • AutoDCR, or

  • Any other computerised platform notified by the Government; or

• Offline, where no online system is yet in place, following the procedure prescribed by the Urban Development Department.

In planning authority areas, the landholder therefore no longer has to approach the Revenue Department separately for NA permission where the proposed use is DP/RP‑permissible.

NA Tax Abolished State wide

The reform also abolishes the recurring annual NA assessment (“NA tax”) across Maharashtra.

• The amendment to the MLRC and the GR together provide that lands in NA use will no longer be subjected to annual NA tax; this applies statewide, not only in municipal areas.

• This permanently ends the dual‑tax situation where NA tax and property tax were both levied on the same constructed property.freepressjournal+2

In addition, the GR provides that arrears of NA tax up to the cut‑off date are remitted, on the condition that landholders regularise their position by paying the prescribed one‑time premium for past NA conversions within the specified time; failing which, the premium becomes recoverable with penalty and interest and the waiver benefit can be lost.

One‑Time Conversion Premium: Rates and Structure

In place of annual NA assessment, the amended section 47 introduces a one‑time “premium for non‑agricultural use of land” (conversion premium).

Basis of Calculation

• The premium is a percentage of the land’s market value as per the current Annual Statement of Rates (ASR) – the Ready Reckoner.

• The rate depends on the total area of the plot:

These slab‑wise rates are expressly provided in the amended section 47 and are repeatedly confirmed in official and practitioner commentaries.

When and by Whom It Is Collected

• The Planning Authority must recover the one‑time conversion premium from the landholder:

  • Before granting development permission, or

  • Before approving the building plan.

• Only after the premium is paid can the Planning Authority issue the development permission or building approval order.

Conversion premium is thus embedded into the planning permission process; there is no separate Collector‑level levy for NA conversion in planning authority areas.

Sharing of Premium Between State and Local Bodies

Although the premium is levied under the MLRC, the GR prescribes how the amount collected is to be shared between the State and local self‑government institutions, depending on the area in which the land is situated.

Sharing Formula (as per GR)

• The State’s share is credited under the revenue head “0029 – Land Revenue” via the GRAS system.

• The local body’s share is transferred to its bank account as per Finance Department procedure.

This maintains revenue for local bodies even as the NA tax regime is abolished.

No NA Sanad Required for Bank Loans

Historically, many banks insisted on a Collector’s NA sanad even when valid building permission existed, causing delays in loan processing. The new framework changes this.

• The GR and subsequent policy statements clarify that once development permission or building plan approval is granted by the Planning Authority under the MRTP Act, a separate NA sanad is not required for the purpose of availing loans on such properties.

• Banks and financial institutions are directed not to insist on NA sanad where planning permission exists and the one‑time premium has been paid.

• Collectors are asked to communicate this change to all banks and financial institutions in their jurisdiction.

In practice, banks are expected to focus on sanctioned plans, premium‑payment proof and clean title/tenure rather than on a separate NA sanad document.

Automatic Update of Revenue Records (Digital 7/12)

To ensure that changes in land use are reflected in revenue records without separate, manual proceedings, the reform mandates integration of planning permission systems with the Digital 7/12 platform.

• Online applications and permissions are processed via BPMS, AutoDCR or other notified platforms.

• Once development permission is granted, the data is transmitted so that mutation entries in the 7/12 extract are automatically updated to reflect the new land use.

• Where digital integration is not yet operational, the Planning Authority must manually intimate the Tahsildar to update the revenue records.

This reduces scope for inconsistent records and removes the need for a separate round of NA‑related proceedings before revenue authorities.

Regularisation of Past NA Conversions: One‑Time Premium in Lieu of NA Tax

The GR and amended section 47 also provide a mechanism to regularise past cases where land had already been converted to NA use and buildings constructed, often with annual NA tax being paid under the old regime.

For such lands:

• The recurring NA assessment is discontinued.

• Instead, a one‑time premium is payable, but computed with reference to the ASR of the year in which the land was originally converted to NA use.linkedin+2

Two Time Periods for Regularisation

1. Lands converted to NA use on or before 31 December 2001

   • One‑time premium is payable at the current slab rates (0.10%, 0.25%, 0.50%), but calculated on the land’s market value as per the ASR of the year 2001.

2. Lands converted to NA use between 1 January 2002 and 31 December 2025

   • One‑time premium is payable at the same slab rates, but on the market value determined as per the ASR of the year in which the land was converted to NA use.

Time Limit and Consequences of Default

• Landholders must pay the calculated premium within one year from the effective date notified in the GR.

• If they fail to do so, the premium becomes recoverable with penalty and interest as arrears of land revenue, and the benefit of waiver of earlier NA tax arrears is lost.

This effectively offers a “settlement window” to shift from recurring NA tax to a one‑time premium with remission of past NA tax demands, provided the landholder complies in time.

Restricted Tenure Lands and Class II Occupancy

An important nuance is that the reform simplifies NA permission and taxation but does not automatically change land tenure or remove restrictions on transfer and use, especially for Class II and other restricted tenure lands.

• For Occupant Class II lands, leasehold lands, lands granted under concessions, or lands governed by special statutes or Government Orders:

  • Development permission or building plan approval does not by itself remove restrictions or convert the land into Class I occupancy.

  • The landholder must obtain the necessary sanction of the competent authority and pay nazrana or premium prescribed in the relevant law or Government Resolution before (or along with) seeking development permission.

• If these tenure‑related requirements are not complied with, action can still be taken under the relevant special law or grant conditions, independently of the planning permission.

In practice, this means that while the NA process is simplified, tenure compliance for government grants and restricted lands remains a separate and live issue.

Occupancy Status Not Automatically Upgraded

New section 42(2) of the MLRC, mirrored in the GR, expressly clarifies that granting development permission or approving a building plan does not, by itself, convert non‑Class I land into Class I occupancy.

• Occupancy status continues to be determined by:

  • The original grant,

  • Conditions of tenure, and

  • The MLRC and allied enactments.

The law thus separates two concepts:

• Land‑use permission and taxation – now made simpler and integrated with the MRTP framework; and

• Tenure/occupancy – unchanged unless formally regularised under relevant provisions.

Administrative Directions and Publication

The GR annexes the full text of the Maharashtra Land Revenue Code (Second Amendment) Act, 2025 and:

• Is issued in the name of the Governor, authenticated by digital signature of the competent officer.

• Is circulated to Divisional Commissioners, Collectors, Zilla Parishads, Municipal Corporations, planning authorities, treasuries and other stakeholders for uniform implementation across the State.

• Is published on the official Maharashtra Government website with a unique identifier, making it easily accessible for practitioners and the public.

Parallel media coverage and expert commentary confirm these key features and situate them as a major “ease of doing business” measure in land and real estate regulation.

Practical Takeaways for Landowners, Advocates and Judges

• In DP/RP areas with a Planning Authority:

  • No separate Collector NA permission is needed where the proposed use is DP/RP‑permissible and the Planning Authority sanctions the building plan.

  • Planning Authority is the single window; it recovers the one‑time conversion premium before granting permission.

• NA tax:

  • Recurring annual NA assessment is abolished statewide.

  • Past NA tax arrears are waived, subject to timely payment of the one‑time premium for past NA conversions.

• Premium:

  • One‑time premium rates are modest – 0.10%, 0.25% and 0.50% of ASR market value depending on plot size – and are collected upfront.linkedin+2

• Banks and NA sanad:

  • NA sanad is no longer required where valid planning permission exists; banks are expected to rely on sanctioned plans, premium payment proof and updated land records.linkedin+1

• Tenure and Class II lands:

  • Tenure restrictions remain and must be separately complied with; NA reforms do not auto‑convert tenure.

For courts and practitioners, future disputes are likely to focus on: applicability in non‑planning areas, computation of premium (especially for old conversions), proof of “year of conversion” for retrospective cases, and enforcement of tenure conditions vis‑à‑vis the new streamlined NA framework.