Non-Agricultural land has more valuation than other lands

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Non-Agricultural land has more valuation than other lands

Content Table:

  • What is NA?
  • NA from the terminology of Foot2Feet?
  • NA from common facts in feasibility report
  • Misconceptions of NA
  • Process to do NA in a Municipal corporation
  • Process of NA in a Non-municipal corporation
  • Conclusion

Lands or plots are broadly classified into three major types; Agricultural land, Non-agricultural land (NA) and Forest land.

What is NA?

Non-agricultural land or NA is a type of land on which residential or commercial buildings, factories, and industries can be constructed. Whereas, agricultural lands are typically lands devoted to agricultural activities. It is illegal to construct a residential or commercial estate upon agricultural lands.

A. NA from the terminology of Foot2Feet:

Non-agricultural land or NA can be from different zones like Urbanizable Zone, Industrial Zone, Recreational Zone & Residential Zone or R-Zone. For NA land, zone plays an important role. Any land is by default agriculture land in India, except the land in Gaothan area. NA land is not necessarily to be residential all the time, and similarly residential land is not necessarily NA land always.

B. NA from common facts in feasibility report:

Feasibility is one of the primary steps that owners, developers or builders conduct. The feasibility report states the possibilities and written statements that your land or piece of plot is possibly fit to withstand your planned project. It may contain graphs, statistics, statements, and an in-depth analysis of certain components.

After buying NA it is important to see if the land is feasible or not for construction. It assists in the growth and development of papers of execution and determines the required permissions and approvals needed for NA.

C. Misconceptions of NA:

There are few misconceptions regarding the non-agricultural land which need to be eradicated. Listed below are some of the myths that are often associated with NA:

  1. Tax benefits: It is a common assumption among people that there are no tax benefits in buying NA land as against buying pre-built houses. Yes, it is true that the interest payable on a loan taken to buy a plot of land is tax deductible only if that land is used for generating income, unlike a loan taken to acquire a property. However, the interest can be capitalized and added to the cost of acquisition of the plot, which can help in reducing the capital gain tax liability at the time of sale of the plot.
  2. Cost: Buying a piece of land does not need tonnes of cash, as it is in the case of buying pre-built houses. A good land deal can be locked at a moderate investment of Rs. 5-10 lakhs in a good location which is quite capable of yielding worthwhile returns in the long term, usually 5-7 years, but 10-15 years is always a better bet.
  3. Loans: It’s a misconception that banks do not provide loans for buying NA land. But, banks do provide financing for buying land from statutory bodies or reputed developers. However, the interest rates for buying land are about 1-2% higher when compared to regular home loans. Also, the tenure of such a loan is restricted to a maximum of 7-10 years.

D. Process to do NA in a municipal corporation:

Before carrying out any development on the agricultural land, the occupant of the land has to apply to the collector for permission to convert the use of agricultural land for any non-agricultural purpose.

After converting the agricultural land into NA land, it becomes easier to receive permission for construction from the local governing bodies.

Let’s take a look at various steps to be followed to do the NA process:

  1. Apply for building permission: In order to start any new building construction, the occupant or superior holder of land need to first furnish an application form along with the supporting documents to the District collector in whose jurisdiction the concerning agriculture land is situated.
  2. Verification: After receiving the application request, the concerning District collector will acknowledge the application within seven days and send a copy of the application to Tahsildar. If the proposed area is within the jurisdiction of a Municipal corporation, the collector consults them concerning acquiring the building permit.
  3. Get NA NOC from Tahsildar: TheTahsildar will check for revenue clearance and technical clearance. The tahsildar will also check certain parameters like if the applicant is the rightful occupant of land and is empowered to file for a change of land use if any dues are pending to any department by the occupant, and whether the local authority has any objections for land conversion.
  4. Issuing of NA conversion order: The District collector will issue an order of conversion within a month of the date of payment of premium and then authorize the Tahsildar to change the particulars of the land by making necessary entries in the revenue records.
  5. Pay NA Taxes: The land occupier or landholder has to pay NA land taxes from the date on which NA land use begins. If the occupier or holder fails to inform the Tahsildar within the period specified, he/she will be liable to pay in addition to the non-agricultural assessment fine of five hundred rupees to the District collector.

E. Process of NA in a non-municipal corporation:

If there is no Municipal Corporation or Municipal Council in the area for proposed conversion of agricultural land to non-agricultural land, the applicant needs to submit a No Objection Certificate (NOC) and clearance certificate.

F. Conclusion:

The process of land conversion from agricultural to non-agricultural might look tedious and lengthy, but it is quite simple if implemented properly. To know more about various factors involved in land deals, land reservations, and different types of land zones, keep in touch with Foot2Feet.

We provide various services, solutions and deep knowledge related to land, construction, Tax NOC, and much more.

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