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‘NA’ Tax Waived for Redevelopment, but Lump-Sum Premium Mandatory; Confusion Persists Among Old Housing Societies
Mumbai: Although the State Government has announced a decision to waive the Non-Agricultural (NA) tax, a lump-sum amount—in the form of a ‘conversion premium’—will be collected in its stead during the redevelopment process. The Brihanmumbai Municipal Corporation (BMC) has issued a circular in this regard. However, the circular remains silent regarding the applicability of the NA tax to plots that have already undergone redevelopment or those that are not eligible for redevelopment.
According to a Government Resolution issued by the Revenue Department on February 10, 2026, the NA tax has been abolished henceforth, and there will no longer be a need to obtain a separate charter (license) for it. This decision was taken to address the issue of dual taxation in urban areas, where the NA tax was being collected by the District Collector's office, while property tax was being collected by the Municipal Corporation.
When granting building permissions to cooperative housing societies coming forward for redevelopment, the Planning Authority will collect the NA tax in the form of a lump-sum premium (Development Premium). This will eliminate the need for a separate NA license. However, a distinct procedure will still need to be followed to update the records maintained by the Revenue Department (specifically, the 7/12 extract and the Property Card).
Salil Rameshchandra, President of the Federation of Cooperative Housing Societies on Government Land, has drawn attention to this matter. He stated, "While it appears that the government's decision has put an end to the process of issuing 7/12 extracts and Property Cards, the BMC's circular does not explicitly mention this."
Ambiguity continues to prevail regarding the NA tax applicable to plots that have not yet been developed or those that have already undergone development. There is a growing demand for the government to provide immediate clarification regarding such housing societies. There is an atmosphere of confusion within housing societies due to the lack of clarity regarding societies that are not interested in redevelopment.
Mumbai: Although the State Government has announced a decision to waive the Non-Agricultural (NA) tax, a lump-sum amount—in the form of a ‘conversion premium’—will be collected in its stead during the redevelopment process. The Brihanmumbai Municipal Corporation (BMC) has issued a circular in this regard. However, the circular remains silent regarding the applicability of the NA tax to plots that have already undergone redevelopment or those that are not eligible for redevelopment.
According to a Government Resolution issued by the Revenue Department on February 10, 2026, the NA tax has been abolished henceforth, and there will no longer be a need to obtain a separate charter (license) for it. This decision was taken to address the issue of dual taxation in urban areas, where the NA tax was being collected by the District Collector's office, while property tax was being collected by the Municipal Corporation.
When granting building permissions to cooperative housing societies coming forward for redevelopment, the Planning Authority will collect the NA tax in the form of a lump-sum premium (Development Premium). This will eliminate the need for a separate NA license. However, a distinct procedure will still need to be followed to update the records maintained by the Revenue Department (specifically, the 7/12 extract and the Property Card).
Salil Rameshchandra, President of the Federation of Cooperative Housing Societies on Government Land, has drawn attention to this matter. He stated, "While it appears that the government's decision has put an end to the process of issuing 7/12 extracts and Property Cards, the BMC's circular does not explicitly mention this."
Ambiguity continues to prevail regarding the NA tax applicable to plots that have not yet been developed or those that have already undergone development. There is a growing demand for the government to provide immediate clarification regarding such housing societies. There is an atmosphere of confusion within housing societies due to the lack of clarity regarding societies that are not interested in redevelopment.
According to a Government Resolution issued by the Revenue Department on February 10, 2026, the NA tax has been abolished henceforth, and there will no longer be a need to obtain a separate charter (license) for it. This decision was taken to address the issue of dual taxation in urban areas, where the NA tax was being collected by the District Collector's office, while property tax was being collected by the Municipal Corporation.
When granting building permissions to cooperative housing societies coming forward for redevelopment, the Planning Authority will collect the NA tax in the form of a lump-sum premium (Development Premium). This will eliminate the need for a separate NA license. However, a distinct procedure will still need to be followed to update the records maintained by the Revenue Department (specifically, the 7/12 extract and the Property Card).
Salil Rameshchandra, President of the Federation of Cooperative Housing Societies on Government Land, has drawn attention to this matter. He stated, "While it appears that the government's decision has put an end to the process of issuing 7/12 extracts and Property Cards, the BMC's circular does not explicitly mention this."
Ambiguity continues to prevail regarding the NA tax applicable to plots that have not yet been developed or those that have already undergone development. There is a growing demand for the government to provide immediate clarification regarding such housing societies. There is an atmosphere of confusion within housing societies due to the lack of clarity regarding societies that are not interested in redevelopment.
