Gujarat govt gives nod to move exempting farmers from paying premium for transfer of land

“… at present, in cases involving the sale, transfer, or change in tenure or purpose of lands possessed for agricultural use under new, impartiable, or restricted tenure, prior approval is required from the Collector or the State Government, subject to certain conditions. Additionally, farmers are bound to pay a premium for tenure conversion in such cases,” an official release quoted Patel as saying. “To address these complexities, the Chief Minister has taken decisive and progressive steps. Going forward, all new, impartiable, or restricted tenure lands in the state — excluding areas under municipal corporations, urban development authorities, and the Bhavnagar, Jamnagar, and Junagadh Area Development Authorities — will be treated as Old Tenure Lands,” it added.

The release further said, “This change means that farmers will no longer be required to pay the premium for transfer (of) such land for agricultural or non-agricultural purposes. Moreover, Mamlatdars will be required to carry out suo motu registration to classify such land as ‘Old Tenure’.”

Patel said that the decision will not be applicable to land allotted under Agricultural Land Ceiling Act and Bhoodan Movement and to those which have been given for specific purpose of growing trees for fruits.

As per the release, the state revenue department has also introduced key provisions to simplify non-agricultural land conversion process by facilitating the issuance of Revenue Titles and Legal Occupancy Certificates (RTLOC).

The release listed key components of the system as:

1) The concerned Collector has been instructed to decide on the application within 30 days of its submission,

2) If a non-agricultural application is submitted after obtaining the certificate, a notification regarding the applicable premium, penalty, conversion charges, or special tax will be issued within 10 days, and

3) If the application is made without obtaining the certificate, it will be processed according to the existing system.

The government has also taken a key decision related to the verification of a person’s status as an agriculturist.

The release stated, “In cases involving verification of the applicant’s status as an agriculturist — particularly when the land is originally of old tenure or eligible for premium and is being converted for non-agricultural use — land records from 25 years before the date of application will no longer be considered for agriculturist verification.”

Minister Patel also announced changes made to the Gujarat Stamp Act aimed at ensuring effective implementation of the Act by lowering public rates and enhancing administrative simplicity and flexibility. The changes will come into effect from April 10.

Listing some of the important changes, an official release stated: In cases of ancestral property, heirs of a deceased daughter can correct right-related deficiencies in documents by paying a stamp duty of Rs 200; for loans up to Rs one crore, the stamp duty is capped at a maximum of Rs 5,000; for mortgage or hypothecation documents about loans exceeding Rs 10 crore, the maximum stamp duty has been increased from Rs 8,00,000 to Rs 15,00,000. But, in cases where the loan is obtained from multiple banks, a separate provision has been made to cap the stamp duty at Rs 75,00,000, excluding a surcharge.”

It further said, “If an applicant voluntarily pays the shortfall in stamp duty, it will be recovered at 2 per cent per month from the date of the document, subject to a maximum of four times the unpaid amount; In cases where stamp duty evasion is identified by the system, a penalty will be levied at 3 percent per month, capped at six times the unpaid duty; For lease agreements of less than one year, where 1 per cent of the average annual rent was earlier paid on Rs 300 stamp paper without proper duty, the State Government has now fixed the duty at Rs 500 for residential leases and Rs 1,000 for commercial leases.”

In the budget session of Gujarat Assembly that concluded last month, Gujarat Stamp (Amendment) Bill 2025 was passed with all these changes to the Act.

Significance of the move

The decisions, especially the one on suo motu converting New Tenure Land to Old Tenure Land in rural and nagarpalika areas of the state, are aiming “to accelerate industrial development, boost trade and employment and promote affordable housing” and to strengthen the Ease of Doing Business in Gujarat. The government has ‘let go’ of premium on conversion of New Tenure land into Old Tenure Land, which is necessary to change the purpose of land from agriculture to non-agriculture. Minister Rushikesh Patel said that the government has “let go a big amount” to simplify the process of development. Sources said that people were complaining a lot about difficulties they were facing in conversion of land from New Tenure to Old Tenure.