NA conversion: changing agricultural land to non-agricultural use

The rule

• Agricultural land is for agriculture. Both Codes let the holder put up farm buildings, wells, tanks and improvements for better cultivation (Maharashtra s. 41; Karnataka s. 95(1)). Karnataka limits a farm house to 10% of the holding, for the farmer’s own use, not to be let out commercially.
• Any other use needs the state’s procedure, which also governs the fee and the update of the land record.
• Conversion is separate from the right to buy. Who may buy farmland is a different question, covered in agricultural land purchase restrictions.
• Conversion is separate from building approval. The local planning authority still approves the layout and the building plan. See buying land and plots.

State by state (Codes read)

Maharashtra: Land Revenue Code, as amended to 2026

• Section 42 (substituted by Mah. 57 of 2025, dated 31 December 2025 in India Code’s list of amending Acts): “No permission of the Collector for change in use of land from agricultural to non-agricultural is required” if the use is permissible under the draft or final Development Plan or Regional Plan, or the development control regulations under the Maharashtra Regional and Town Planning Act, 1966. The Planning Authority gives development permission or approves the building plan.
• Old procedure removed. The same amendment deleted sections 42A to 42D and 44 to 46, which held the earlier deemed-conversion and permission routes.
• Premium (section 47). The Planning Authority recovers a one-time premium on the current market value in the Annual Statement of Rates (ready reckoner):

Land converted on or before 31 December 2001 pays the same rates on the 2001 statement of rates; land converted from 1 January 2002 until the 2025 amendment pays them on the rates of the year of conversion, both instead of the annual non-agricultural assessment. The State Government may exempt public-purpose projects.

• Calculation, not a quote: for a plot of 800 sq m with a ready-reckoner value of ₹40,00,000, the premium is 0.1%, that is ₹4,000.
• Record of rights. Once permission is given, “necessary changes shall be effected in the revenue records” (s. 42(4)), so the 7/12 extract should show the change; see mutation of property records.
• Occupancy class. Land other than Class-I occupancy keeps its status even if a building plan is approved (s. 42(2)).
• Buyer who is not an agriculturist. Under the Tenancy Act, s. 63(1C), a non-agriculturist who buys zoned land for a non-agricultural use must put it to that use within five years; the Collector can extend by five years against a charge of 2% of market value a year, after which the land can be resumed.

Karnataka: Land Revenue Act, section 95

• Application. An occupant who wants to divert agricultural land files an affidavit and application to the Deputy Commissioner (s. 95(2)).
• Inside a published master plan: no Deputy Commissioner permission is needed if the use matches the land use in the master plan under the Karnataka Town and Country Planning Act, 1961; the prescribed fee is paid to the Town Planning Authority with a self-declaration (s. 95(2)(i)).
• Outside a local planning area without a master plan: the authorities consulted give their opinion within 15 days (silence counts as no objection), and if the Deputy Commissioner does not decide within 30 days, approval is deemed granted (s. 95(2)(ii)).
• Part of a survey number: a pre-conversion sketch approved by the Survey Settlement and Land Records Department must be filed; if the department does not decide in 15 days, the sketch is deemed approved (s. 95(2)(iv)).
• Small industry: no diversion is required for agricultural land up to 2.00 acres used to set up new industries (provisos inserted in 2025).
• Granted land is refused if diversion would breach the Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 or the grant conditions (s. 95(2)(v)).
• False affidavit: the diversion is void, the fee is forfeited and the land may be forfeited to the Government (s. 95(2)(iii)).
• Fee: “a fee as notified from time to time” (s. 95(7)). The notified amounts were not read for this guide.
• Guidance value: a diversion order alone does not raise the guidance value until the land is actually used (s. 95(2)(vi)); see circle rate and guidance value.

Other states

Each state has its own revenue Code and terms such as “change of land use” or “diversion”. Read the state Land Revenue Code on India Code and ask the Tahsildar which authority decides.

Before you buy “converted” land

1. Ask for the conversion order or, in Maharashtra, the planning permission and premium receipt.
2. Check that the record of rights shows non-agricultural use.
3. Check the zoning in the development or master plan; conversion does not create a road, drainage or an approved layout.
4. Run a title search and encumbrance certificate, and ask a property lawyer to read any grant or tenure condition.

Sources and limits

Only the Maharashtra and Karnataka Acts listed were read. Not read: the Karnataka notified conversion fees and the commencement date of Mah. LVII of 2025 beyond India Code’s list. This guide is general information, not legal advice.