Maharashtra Scraps Non-Agricultural Tax on Urban Construction and Housing Societies

Mumbai: Revenue Minister Chandrashekhar Bawankule admitted in the legislative assembly on Wednesday that while the decision to abolish the entire non-agricultural (NA) tax on land under residential, commercial, and industrial use in urban areas was taken in the state cabinet in October 2024, it was not converted into law due to administrative reasons.

Bawankule said in the cabinet meeting in November 2025, a decision was taken to abolish the provisions regarding the levy of NA tax in the state and all NA tax has been abolished in urban areas. 'Accordingly, the provisions regarding the levy of NA tax have been repealed as per the Maharashtra Land Revenue (Second Amendment) Act, 2025, dated December 31, 2025. A lump sum conversion surcharge will be levied as mentioned in Section 47 of the Amendment Act,' Bawankule said in his reply.

Bawankule clarified that there will be no NA tax on any construction or housing societies in urban areas. Bawankule was replying to a question raised by MLA Bhimrao Tapikar. 'Also, in accordance with the amendment, the revenue and forest department had in February 2026 instructed that the NA tax levied annually on uncultivated properties in the state should not be levied, and the arrears of NA tax levied annually up to the date of the amendment should not be recovered, instead, a lump sum conversion surcharge should be levied as mentioned in Section 47 of the amendment Act,' Bawankule said.

Officials noted that the NA tax has been permanently abolished. The reform comes nearly one-and-a-half years after it was first proposed and is expected to accelerate redevelopment and regularization of aging housing societies in major cities like Pune, Mumbai, and Thane. The notification, issued in February, amends the Maharashtra Land Revenue Code to eliminate the annual NA tax, as well as the requirement for a separate non-agricultural land-use permission from the district collector. 'This is applicable provided the proposed land use is permissible under the applicable development plan, regional plan, or development control regulations,' an official said.