How To Convert Agricultural Land For Residential Use

Your absolute ownership over an agricultural land parcel notwithstanding, you could not use this land to build residences unless the government grants you permission to do that. Under the provisions of the law in India, fertile agricultural land could only be used for agricultural purposes and nothing else. To use it for a purpose other than that i.e. residential, commercial or industrial use, the owner has to seek an approval from the authorities concerned and change the “land use”. Unless this procedure is followed, you would be undertaking an illegal activity if you built a residence or ran a business on farm land in India. 

Procedure for conversion of agriculture property

In India, land is a state subject, and, consequently, laws governing it are different in each state. Depending on the state you reside in, you have to approach either the revenue department or the planning authority in your city to convert your agricultural land for residential purposes. In states such as Maharashtra, Karnataka, Rajasthan and Uttar Pradesh, for instance, land owners have to approach the revenue departments of their cities for the conversion.

In districts of Rajasthan, for example, the tehsildar could grant permission for conversion of agriculture land for residential use for parcels measuring up to 2,500 square metre. Developers planning to build housing projects on agricultural land, on the other hand, have to seek approval from the sub-divisional officer (where total area does not exceed 10,000 sqm) or collector (where total area does not exceed ceiling areas) or the state government (where total area exceeds ceiling area). Similarly, approval from the sub-divisional officer, the collector and the state government must be sought if the land has to be converted for commercial purposes.

“Section 143 of the UP Zamindari Abolition and Land Reforms Act authorises the Sub-Divisional Magistrate (SDM) of the area to change the nature of a land from agricultural to residential,” says Lucknow-based lawyer Prabhanshu Mishra.

Under the laws prevailing in most states, fertile land cannot be converted to be used for residential purposes. Only dry or barren land parcels could be converted.  Also, only a farmer is eligible to buy agricultural land, a prerequisite that has been done away in many states now. In UP, for instance, this was changed in 2014.

“Through an amendment in the Zamindari Abolition and Land Reforms Act, the Uttar Pradesh government in 2014 allowed real estate developers to use fertile agriculture land for residential purposes,” Mishra adds.

In Odisha also, this prerequisite has been done away with. Under the provisions of the Odisha Land Reforms (Amendment) Act, 1960, land owners can convert the land use of fertile land also after seeking an approval from the tehasildhar/sub-collector.

In Karnataka, the commissioner of the land revenue department is the authority to grant land conversion approvals. In Andhra Pradesh, tehsildars and revenue divisional officers are authorised to grant approval for this purpose. In both these states, one can apply online for land conversion.

In Bihar, the authority to order conversion rests with the sub-divisional officer.

In states where there is no authority that has been granted specific powers to do so, land owners could write an application to the commission, the district magistrate or the collector for a change of land use.

Land conversion: What documents do you need?

The person seeking conversion will have to provide a long list of documents along with an application, in which they have to specify for what purpose they are seeking the land-use conversion, apart from mentioning all the details pertaining to the said land parcel.

Some of the documents that the applicant will have to produce along with the application include:

• Identity proof
• Sale deed
• RTC (record of rights, tenancy and crops)
• Partition deed (in case the land has been inherited)
• Mutation documents
• Survey map
• Receipt of payment of land revenue, etc.

In case you do not have all these documents, you could approach the revenue department of your city which keeps all maintains these records.

Do note here that before you apply for the conversion, you have to ensure all the bills/taxes pertaining to the land have been paid. The land should also be free from any legal encumbrances to get the approval.

What are the time and charges involved?

A one-time obligatory fee ─ which varies from state to state, district to district and locality to locality ─ has to be paid to get the land conversion certificate. In Andhra Pradesh, for example, three per cent of the land value has to be paid as conversion charge. In Haryana, Rs 210 per square metre is the charge to convert government-control land for residential purposes.

The fee for converting agricultural plot into residential one varies from Rs 60-200 per square yard in Rajasthan. In case of the land is being converted for commercial purposes, the charges range between Rs 400-800 square yards.

In Delhi, conversion charges for permitting residential use vary from Rs 14,328 to Rs 24,777 per square metre, and additional Floor Area Ratio [FAR] charges have been fixed from Rs 3,039 to Rs 7,597 per square metres in various industrial areas.

In Bihar, 10 per cent of the property value has to be paid as conversion charge.

Note here that the receipt of the payment must be kept safe as this paper acts as a proof that your application has been submitted.

It may, however, take a long time before the applicant is able to get the certificate. The Maharashtra Land Revenue Code, 1966, for example, provides a 90-day limit within which the order for conversion should be issued.

However, it might take as many as six months to get the approval “since there are no hard-and-fast rules” pertaining to the time limit within which the task must be completed, says documentary filmmaker Shahid Parvez Sayyad, who bought an agricultural land parcel in Aurangabad to build a house.

After the collector receives your application, a time-taking process unfolds to check the authenticity of these documents. This includes a site inspection by the staff, too.

“The structure of record keeping is such in our country that the authenticity of the claims has to be established through trailing ownership documents, rather than ownership being determined from spatial location and identity,” says Manoj Kumar Chaudhary, a lawyer practicing at the Delhi High Court.

After the commissioner issues the conversion certificate, the applicant will have to obtain a conversion certificate from the tehsildar, confirming the same.

What happens afterward?

Heavy penalties could be levied on you if you use the land converted for a specific purpose for another. Running a commercial set-up on a land converted for residential purposes, for instance, would be illegal and would attract legal action as well as monetary penalty.

In Bihar, for example, 50 per cent of the conversion fee has to be paid as a penalty if the owner is found to be flouting norms.

Online land conversion

While in states like Karnataka, one can apply for land conversion online, other states are joining that league. (You can convert your land for various purposes in Karnataka using the Bhoomi portal.) In October 2020, the Andhra Pradesh government announced that the entire process relating to conversion of agricultural land for non-agricultural purposes would be brought online. Users will be able to carry out this task using the Dharani portal in AP.

In Odisha, the state government has developed an online single-window portal, GO SWIFT (this is short for Government of Odisha Single-Window for Investor Facilitation and Tracking) that allows land conversion, among many other facilities.