Maharashtra Land Revenue Code (Second Amendment) Act, 2025: Streamlining non-agricultural land conversion in Maharashtra – EQ
The Government of Maharashtra has introduced the most significant structural reforms to land use regulation in the State in recent decades through the Maharashtra Land Revenue Code (Second Amendment) Act, 2025 (“Amendment Act“). The State Legislature by amending the Maharashtra Land Revenue Code, 1966 (“MLRC”) has moved away from a revenue-driven permission system towards a planning-based framework aligned with the Maharashtra Regional and Town Planning Act, 1966 (“MRTP Act”).
The Amendment Act notified on December 31, 2025 after receiving the assent of the Governor, changes how agricultural land can be converted for Non-Agricultural (“NA”) use. The reform removes several procedural hurdles that previously caused delays and uncertainty for landowners and developers.
Legislative background
Before this Amendment Act, conversion of agricultural land for NA purposes required multiple steps viz., prior permission from the Collector, issuance of a NA Sanad, and payment of recurring NA assessment in the form of an annual charge.
These requirements were governed by various provisions of the MLRC, including Sections 42, 42A to 42D, 44, 44A and allied provisions, read with the Maharashtra Land Revenue (Conversion of Use of Land and NA Assessment) Rules, 1969.
Therefore, for development of projects while NA Sanad was required to be obtained from the State’s revenue department under the MLRC, a developer also had to approach the State’s planning authorities for development approvals under the MRTP, thereby dealing with 2 (two) separate authorities under 2 (two) separate legislations.
Key amendments introduced under the Amendment Act
Deletion of definitions and enabling provisions
The Amendment Act deletes Clause (7-A) and Clause (21) of Section 2 of the MLRC, which were linked to the NA permission and assessment framework. The Amendment Act has also deleted sub-Section (2) to sub-Section (6) of Section 41 of the MLRC, thereby removing ancillary procedural provisions connected with the said process.
Substitution of Section 42: Abolition of Collector’s permission
Section 42 of the MLRC has been entirely substituted with a new section which provides for the following:
- no permission of the Collector is required for change in use of land from agricultural to NA, provided such use is permissible under a draft or final ‘Development Plan’ or ‘Regional Plan’ prepared and published under the MRTP Act, or under Development Control Regulations, 1991 or other rules, regulations, orders or guidelines issued thereunder;
- the concerned ‘Planning Authority’ is empowered to grant development permission or approve building plans, and this approval is sufficient to effect lawful conversion of land use;
- grant of development permission or approval of building plans does not, by itself, alter the occupancy status of land other than Class-I occupancy land; and
- upon grant of development permission or building plan approval, necessary changes are required to be effected in the revenue records in accordance with such permission or approval.
This provision establishes planning permission as the sole trigger for lawful NA use, displacing the Collector’s discretionary role under the earlier section 44 of the MLRC.
Comprehensive deletion of NA conversion and assessment machinery
Sections 42A, 42B, 42C and 42D of the MLRC are deleted. Earlier these provisions carved out multiple situations where separate NA permission was deemed unnecessary subject to specified conditions and payment of assessment. These fragmented exemptions are now consolidated into the substituted Section 42 under the Amendment Act.
Additionally, the Amendment Act has deleted Sections 44 and 44A of the MLRC, which were the key provisions of the earlier conversion permission and Sanad framework. It has also deleted Sections 45 and 46 of the MLRC, which were consequential provisions. Together, these changes remove the statutory basis for requiring a Sanad or Collector’s order for NA use.
Section 47A of the MLRC, relating to NA assessment has also been deleted. The Amendment Act has done away with the entire chapters on the NA assessment machinery. Chapter VII and Sections 108 to 120, which previously set out the NA assessment and related machinery, have been repealed. Corresponding amendments have been made in Sections 67, 125 and 328 of the MLRC to remove references to these repealed provisions.
Introduction of one-time premium
Section 47 of the Amendment Act replaces recurring NA assessment with a one-time premium linked to the market value of land (as per the Annual Statement of Rates).
The one-time premium will be calculated as per the following slabs:
| For land area upto 1 ,000 square metres | 0.1 % of market value |
| For land area more than 1 ,000 square metres and up to 4,000 square metres | 0.25% of market value |
| For land area more than 4,000 square metres | 0.5% of market value |
In cases where conversion took place on or before December 31, 2001, the annual NA assessment is replaced with a one-time premium calculated based on the Annual Statement of Rates (ASR) applicable for the year 2001. For land converted to NA use on or after January 1, 2002 but prior to the commencement of the Amendment Act, the annual assessment is replaced by a one-time premium calculated based on the Annual Statement of Rates applicable in the year of conversion. Additionally, the State Government retains the power to grant exemptions for projects serving public purposes or public interest.
Legal and practical implications of the reform
The Amendment Act firmly shifts land use governance from revenue authorities to planning authorities. This reduces duplication and procedural delays and is expected to improve efficiency in project approvals and eventually project construction and delivery. Moreover, replacing the payment of annual NA assessment with a one-time premium also removes a continuing financial burden linked directly to clear identification of project costs and financial feasibility of projects. Although, property taxes payable to local authorities remain unaffected. Historically, the absence of a Sanad or NA order was treated as a title defect. After this Amendment Act, such issues may not arise as long as valid planning permission is obtained and the required one-time premium is paid. Legally, careful examination will still be required for older land conversions, particularly to verify compliance with the transitional premium provisions applicable to pre-amendment cases.
Conclusion
The Amendment Act represents a major structural reform in land regulation. By eliminating Collector-centric approvals, removing Sanad requirements, and introducing a rational one-time premium system, the amendment simplifies the process of converting land for NA use while maintaining regulatory oversight through planning laws. Overall, the reform aligns land administration with modern urban planning needs and is likely to have far-reaching implications for real estate development, infrastructure projects, and land transactions across the State of Maharashtra.
JSA – M. Arun Kumar, Deepak Chowdhury, Rachana Magdum and Vivek Jain
