State replaces NA annual tax with one-time premium, sets deadline of Dec 31

The move is part of the state government’s revised framework for housing societies whose land use was changed from agricultural to non-agricultural at the time of granting development permission or approving building plans

MUMBAI: The Maharashtra government has directed housing societies that have obtained deemed conveyance to pay a one-time non-agricultural (NA) conversion premium in lieu of the annual NA tax by December 31, 2026. Failure to pay the premium within the stipulated period will attract penalties and interest. The directive applies to housing societies across the state.

State replaces NA annual tax with one-time premium, sets deadline of Dec 31

A circular to this effect was issued by the state revenue department on October 15.

The move is part of the state government’s revised framework for housing societies whose land use was changed from agricultural to non-agricultural at the time of granting development permission or approving building plans. Most housing societies in urban areas, including those situated on MHADA land, are liable to pay the annual NA tax.

Under the revised rules, the concerned tehsildar will calculate the premium payable by each housing society based on the applicable Annual Statement of Rates (ASR) and initiate the recovery process. The premium will be determined according to the land’s market value as per the ASR prevailing in the year the land was converted to non-agricultural use. For instance, if the conversion took place on or before December 31, 2001, the ASR for 2001 will be used.

The government has also clarified that where planning authorities have already collected the one-time premium in lieu of the annual NA tax, the amount must be deposited into the government account.

Elaborating on the details, a senior revenue official said that fresh land measurement would not be necessary if the planning authority had issued an occupancy certificate, and a measurement map was available. “Measurement may be undertaken where required for demarcation, establishing boundaries or other purposes,” the official explained.

The circular further mandates that the premium be recovered by December 31, 2026. “If the property holders fail to deposit the amount within the stipulated deadline, the outstanding amount shall be recovered along with the applicable penalty and interest after the deadline expires,” the document states.

It is estimated that hundreds of housing societies could be affected by the decision in Mumbai alone, with the number likely to be higher in Mumbai’s suburbs, said housing society activist Salil Ramchandra. “We have been paying the NA tax for years,” he said. “Now, the state government wants us to pay a one-time premium that could run into lakhs of rupees, adding to the financial burden on housing societies. This is likely to lead to resentment among flat owners.”