The terms “change of land use” and “conversion” are used synonymously in real estate transactions without understanding their meaning and the distinction between the two.

When a land in a survey number coming within the jurisdiction of a town planning authority, say the Bangalore Development Authority, is earmarked as a residential zone in the Comprehensive Development Plan but the owner of the land wants to use it for industrial purposes, he will have to obtain change of use under the provisions of Section 14-A of the Karnataka Town and Country Planning Act, 1961, from the Bangalore Development Authority.

However, in certain specific cases where the change of land use is sought from commercial or industrial to residential or from industrial to commercial uses and purposes, the planning authority will collect a stipulated fee and on such collection, the change of land use shall be deemed to have been granted.

Unlike change of land use which pertains to changing the zone earmarked in the master plan, conversion of agricultural land to non-agricultural uses and purposes is carried out under the provisions of Section 95 of the Karnataka Land Revenue Act, 1964, by the Deputy Commissioner or the Special Deputy Commissioner as the case may be. Once a land is converted, its primary character is changed from agricultural to non- agricultural and the land permanently loses its agricultural character. This need not necessarily happen in the case of change of land use since only the zoning is changed and not its primary character of being agricultural land. The process of conversion also involves the payment of conversion fine as directed by the office of the Deputy Commissioner or the Special Deputy Commissioner as the case may be.

Fee structure

The application for conversion from agricultural to non-agricultural residential uses and purposes cannot be refused by the Special Deputy Commissioner if the land use earmarked in the master plan is residential. The fees or fine charged for change of land use and conversion differ. The change of land use from any zone to commercial zone costs approximately Rs.7 per sq.ft. as against the conversion fine levied for agricultural land to non-agricultural commercial uses and purposes which is Rs.4 per sq.ft. as on date.

If ‘A’ acres of land in ‘B’ Village, “C” Taluk and “D” District is earmarked as residential zone in the master plan but the owner of the land wants to use it for commercial purposes, he will first have to apply for change of land use to the town planning authority. After obtaining the same, he will have to apply to the Deputy Commissioner or the Special Deputy Commissioner, as the case may be, seeking permission for the conversion of the said agricultural land to commercial uses and purposes since, although the land use has been changed from residential to commercial in the master plan, the primary character of the land will remain agricultural till conversion is obtained before the same can be put to use for commercial purposes.

(N.C.S. Raghavan is a chartered accountant and Arvind Raghavan, an advocate)