Agricultural land in Maharashtra is one of the most tax-efficient real estate assets in India—but only when buyers clearly understand state-specific tax rules, land classification, and compliance requirements.
From income tax exemption to capital gains relief, from 7/12 land records to NA conversion impact, this guide explains everything about agricultural land tax in Maharashtra in a clear, practical, and legally correct manner—the same framework used by experienced Weekend home developers like Acreages while guiding buyers across Maharashtra.
Why Maharashtra Agricultural Land Is a High-Demand Asset
Maharashtra leads India in:
- Agricultural land transactions
- Farmhouse & weekend home developments
- Infrastructure-driven land appreciation (expressways, corridors, industrial belts)
Despite this growth, tax mistakes are common—mainly due to confusion between rural vs urban agricultural land.
This is why professional due diligence and guidance, such as that offered by Acreages through verified land checks, becomes critical before investing.
- What Is Agricultural Land as per the Maharashtra & Income Tax Laws?
In Maharashtra, agricultural land is identified through:
- 7/12 Extract (Satbara Utara)
- Land-use classification: Agricultural (AG)
For taxation purposes, agricultural land is classified into:
- Rural Agricultural Land
- Urban Agricultural Land
This classification directly decides whether capital gains tax applies or not, making it one of the first checks Acreages conducts before recommending any land parcel.
- Agricultural Income Tax in Maharashtra (100% Exempt)
As per the Income Tax Act:
- Agricultural income is fully exempt from income tax
This includes:
- Crop cultivation income
- Sale of farm produce
- Income from orchards and plantations
- Rent received from agricultural land
✔ No slab rate
✔ No surcharge
✔ No cess
📌 Important:
Agricultural income may be considered only for rate calculation purposes if non-agricultural income exceeds basic exemption limits—but it is not taxed directly.
- Capital Gains Tax on Agricultural Land in Maharashtra
- Rural Agricultural Land – NO Capital Gains Tax
Rural agricultural land is not treated as a capital asset.
✔ No short-term capital gains
✔ No long-term capital gains
✔ No reinvestment condition
Most agricultural land in locations such as Murbad, Shahapur, Karjat, Khalapur, interior Alibaug, and rural Nashik belt falls under this category—making them preferred zones for long-term land investors and weekend home buyers guided by Acreages.
- Urban Agricultural Land – Capital Gains Applicable
Agricultural land is considered urban if it is:
- Within municipal limits, or
- Near notified urban areas
Tax Rates
- Holding ≤ 2 years → As per the income tax slab
- Holding > 2 years → 20% with indexation
Many lands near highways and city outskirts fall into this category, which is why classification verification is mandatory before purchase.
- Capital Gains Exemption – Section 54B (Very Important)
Capital gains on agricultural land sale can be fully exempt if:
- Sale proceeds are reinvested in another agricultural land
- Purchase is made within 2 years
Conditions
- Applicable to Individuals & HUFs
- The sold land must have been used for agriculture for at least 2 years
✔ This exemption is commonly used by Maharashtra farmers and land investors to upgrade or relocate land holdings without tax leakage.
- Stamp Duty & Registration Charges in Maharashtra
Stamp Duty
- Generally, 5% to 7% (location-dependent)
- Usually lower than NA or residential land
Registration Charges
- Around 1%
📌 Due to lower guidance values, agricultural land transactions typically involve lower upfront costs, another reason Acreages focuses on AG land-based projects.
- Wealth Tax & Annual Holding Cost
✔ No wealth tax on agricultural land
✔ No municipal property tax in most rural areas
✔ Negligible local cess
- NA Conversion in Maharashtra & Tax Impact
When agricultural land is converted to Non-Agricultural (NA):
- Conversion premium becomes payable
- Land becomes a capital asset
- Future sale attracts capital gains tax
- Stamp duty increases
- GST on Agricultural Land in Maharashtra
- Sale of agricultural land → No GST
- Lease for farming → GST exempt
- Lease for commercial use → 18% GST applicable
GST applies only when land use shifts away from agriculture.
- Agricultural Land Leasing & Tenancy Income
- Lease for agricultural use → Income remains exempt
- Sharecropping income → Exempt
- Lease for non-agricultural use → Fully taxable
- Farmhouse & Weekend Home on Agricultural Land (Maharashtra)
- Construction alone does not change land classification
- Agricultural income remains exempt
- NA conversion is required only for large-scale residential or commercial development
📌 This is why many farmhouse and weekend home projects near the Mumbai–Pune belt, curated by Acreages, are planned on agricultural land with proper legal structuring.
- Gift & Inheritance Tax on Agricultural Land
Gift
- To blood relatives → Tax-free
- To non-relatives → Taxable if value exceeds ₹50,000
Inheritance
- No inheritance tax in India
- Capital gains apply only at the time of sale
- Why Agricultural Land in Maharashtra Is a Tax-Efficient Investment
✔ Exempt agricultural income
✔ Zero capital gains
✔ Very low holding cost
✔ Strong appreciation of infrastructure corridors
✔ Ideal for farmhouse living and legacy wealth creation
FAQ Section
Q1. Is agricultural land taxable in Maharashtra?
No. Agricultural income is fully exempt from income tax. Capital gains tax is not applicable if the land is rural.
Q2. Is capital gains tax applicable to agricultural land sales in Maharashtra?
Capital gains tax does not apply to rural agricultural land.
Q3. How to know if agricultural land is rural or urban in Maharashtra?
Check:
- Distance from municipal limits
- Population of the nearest municipality
- Land records and government notifications
Q4. What is the role of 7/12 extract in agricultural land taxation?
The 7/12 extract confirms land classification, ownership, and agricultural usage. Incorrect entries can cancel tax exemptions.
Q5. Is GST applicable to agricultural land in Maharashtra?
No GST applies on sale or lease used for farming. GST applies only for commercial usage.
Q6. What is NA conversion, and how does it affect tax?
After NA conversion:
- Capital gains tax becomes applicable
- Stamp duty increases
- Tax advantages reduce
Q7. Is stamp duty lower on agricultural land in Maharashtra?
Yes. It is generally lower than residential or NA land.
Q8. Is any property tax or village gram panchayat tax applicable to agricultural land?
No.
Final Conclusion
Agricultural land in Maharashtra is not just farmland—it is a strategic, low-tax, future-ready real estate asset.
When selected carefully and structured correctly, it offers:
- Minimal tax exposure
- Strong long-term appreciation
- Lifestyle + investment benefits
- Smooth inter-generational wealth transfer
For investors and weekend home buyers, agricultural land remains one of the smartest property choices in Maharashtra.
Thinking of Buying Agricultural Land or a Weekend Home Near Mumbai or Pune?
If you’re exploring:
- Agricultural land with clear tax advantages
- Farmhouse or weekend home plots near the Mumbai–Pune belt
- Long-term land investments with legal & tax clarity
Acreages help you make informed, confident decisions—without shortcuts. Get in touch with Acreages for verified opportunities and expert guidance.
For more details, visit: www.acreages.co.in
