NALA Conversion in Telangana: Converting Agricultural Land to Non-Agricultural Use

NALA conversion in Telangana is the legal step that turns agricultural land into land you can lawfully use for a house, a layout, a warehouse, a school or a resort. Until it is done, a plot carved out of farm land is still farm land on the record, whatever the brochure, the compound wall or the electricity bill says. The process runs under the Telangana Agricultural Land (Conversion for Non-Agricultural Purposes) Act, 2006, usually shortened to the NALA Act, and today it is handled through the Bhu Bharati land records system with the mandal and divisional revenue officers. This guide explains when you need conversion, how the fee is worked out, the application and timeline, what happens if you build without it, and how layout and building approvals follow once the land is converted.

Fees, procedures and timelines in this guide are stated as of October 2026. The state has amended the conversion procedure more than once since 2020, so verify the current fee and form with the Tahsildar office or the land records portal before you apply.

Who this guide is for

This guide is for landowners planning to build, develop or sell farm land for non-agricultural use; buyers evaluating a plot, farmhouse or villa project that started life as agricultural land; and families who already built a house or farmhouse on farm land and now need to regularise it. NRIs considering plots on the edges of Hyderabad should read it closely, because NALA status decides whether a property is something they are legally allowed to buy at all.

What NALA conversion is, and why it matters

Telangana classifies land in its revenue records by use. Agricultural land is assessed and regulated for cultivation, and the law does not allow it to be used for any other purpose without the permission of the competent revenue authority and payment of a conversion fee. That permission and fee together are NALA conversion.

Why it matters to an owner

• Building permission depends on it. Municipal bodies, HMDA, DTCP and other development authorities will not approve a layout or building on land that is still agricultural on record.
• Registration route changes. Unconverted agricultural land is registered at the mandal Tahsildar office through Bhu Bharati. Converted land registers at the Sub-Registrar Office like any urban plot.
• Bank finance depends on it. Lenders fund plots and houses on converted, approved land. Most will not lend against a house on unconverted farm land.
• Penalties apply for unauthorised use. Using farm land for non-agricultural purposes without conversion invites a penalty on top of the conversion fee, and in some cases action against the structure.

Why it matters to a buyer

For a buyer, NALA status is a filter. A "farm plot" sold in guntas in an unconverted farm venture is agricultural land, and an NRI or OCI cannot buy it under FEMA. A "villa plot" in a layout without conversion and approval may never get building permission. A "converted" plot whose conversion order covers a different survey number or a smaller extent is not converted at all. Our page on NRI agricultural land rules explains the FEMA side.

When you need conversion, and when you do not

Situation	NALA conversion needed?
Farming, orchards, dairy or poultry ancillary to agriculture	Generally no; these are agricultural uses (check local rules for large sheds)
Farmer's own dwelling and farm structures on agricultural land	Usually treated as ancillary; verify locally before building anything substantial
Weekend farmhouse or villa for non-farming owners	Yes, in most cases; it is a residential use
Residential layout of plots	Yes, before layout approval is finalised
Commercial, industrial, warehousing, school, hospital, resort	Yes
Land already inside a layout approved by HMDA or DTCP	Conversion is normally completed as part of the layout process; confirm the order
Land in a master plan zone that does not permit the intended use	Conversion alone does not help; zoning must allow the use

The last row is where many owners trip. NALA conversion is a revenue permission. It does not override the master plan. If the HMDA master plan or a district development plan shows your land in a conservation, recreational or agricultural zone, or inside a lake buffer, the planning authority will refuse a residential layout even if you have paid the conversion fee. Check the zoning first.

How it works: the official process

Before 2020, NALA applications went to the Revenue Divisional Officer (RDO), often with long delays. Since the Dharani reforms, and now under Bhu Bharati, the application is made online through the land records system and decided by the designated revenue authority, with the record updated once the order issues. The older portal at dharani.telangana.gov.in still appears on many conversion orders issued between 2020 and 2025.

Step 1: Confirm the land is eligible

The applicant must be the pattadar on the live record, and the land should be clean patta land. Assigned land, land on the Section 22-A prohibited list, government, endowment, wakf and forest land, and land under dispute will not be converted. Land in a tank bed, inside a lake full tank level or in an irrigation project command area may need clearances or may be refused.

Step 2: Check zoning and access

Pull the master plan land use for the survey number from the planning authority, and confirm the land has legal access by a public road or a recorded right of way. HMDA's master plans can be consulted through hmda.gov.in; outside HMDA, the DTCP or the relevant urban development authority holds the plan.

Step 3: Apply online

The pattadar applies through the land records portal or a Mee Seva centre, selecting the survey number, extent and intended use. Typical attachments are the pattadar passbook, the registered title deed, a recent encumbrance certificate, a survey sketch for the extent being converted, identity proof and, where relevant, no-objection certificates (for example from irrigation authorities near water bodies).

Step 4: Pay the conversion fee

The fee is paid online against the application. It is calculated as a percentage of the basic value of the land, meaning the market value fixed by the Registration and Stamps Department for that village and land type. See the next section.

Step 5: Inquiry and order

Revenue staff verify the record and may inspect the site. The competent authority issues a conversion order specifying the survey number, extent and permitted non-agricultural use. Check every detail on the order against the record and the deed.

Step 6: Record update

The record reflects the land as converted to non-agricultural use. From this point, sale and other transactions are registered at the jurisdictional Sub-Registrar Office rather than the Tahsildar office.

Step 7: Layout or building approval

Conversion makes the land eligible for a planning application. A layout goes to HMDA, DTCP or the relevant development authority; an individual building goes through TG-bPASS or the local body. Our guide comparing HMDA, DTCP and gram panchayat layouts covers that stage, and our guide to building permission under TG-bPASS covers the house itself.

The conversion fee: how it is calculated

Under the NALA Act, the conversion fee is a percentage of the basic value of the land. The percentage depends on where the land is, with higher rates in urban development areas than in rural areas, and the Act has been amended over the years. As of October 2026 the rate commonly applied is in the range of about 2% to 3% of basic value depending on location; verify the current percentage for your village before you budget.

Two features of the fee catch owners out:

• Basic value, not your purchase price. The fee is calculated on the government market value, which in most Hyderabad-fringe villages is well below transaction prices. That keeps the fee modest relative to land prices.
• Penalty for unauthorised conversion. If the land has already been put to non-agricultural use without permission, for example a farmhouse already built, the Act provides for a penalty in addition to the fee, commonly 50% of the conversion fee. Regularising after the fact costs more than converting first.

Timelines and costs at a glance

Step	Typical time	Indicative cost (Oct 2026)
Record, title and zoning check	1–3 weeks	Advocate ₹10,000 – ₹40,000
Survey sketch for the extent	1–3 weeks	₹10,000 – ₹40,000
Online application and documents	1–3 days	Nominal service charges
Conversion fee	Paid with application	About 2–3% of basic value, verify
Penalty for prior unauthorised use	Paid with application	Commonly 50% of the fee, verify
Inquiry and conversion order	30–90 days typically	Included
Layout approval (HMDA or DTCP), if developing	3–9 months	Development charges and fees per authority schedule
Building permission (TG-bPASS or local body)	Days to weeks	Permit fees per built-up area

Ranges come from recent files and advisor observation. Statutory timelines exist for some steps, but field inquiries and incomplete records commonly push timelines out.

Worked example 1: converting two acres near Shadnagar

An owner holds 2 acres of patta land beside a district road in a village near Shadnagar and wants to develop a small residential layout. The land trades at around ₹1.2 crore per acre, but the government basic value for that village is, say, ₹35 lakh per acre.

Item	Calculation	Amount
Basic value	2 acres × ₹35 lakh	₹70,00,000
Conversion fee at an assumed 3%	3% of ₹70 lakh	₹2,10,000
If already put to non-agricultural use: penalty at 50% of fee	50% of ₹2.1 lakh	₹1,05,000
Survey, legal and documentation	Indicative	₹30,000 – ₹80,000

Conversion is the cheap part. The layout that follows gives up roughly 35–40% of the land to roads, open space and amenities, carries development charges, and requires the developer to mortgage a share of plots to the authority until works are complete. A 2-acre parcel of 9,680 square yards typically yields 5,800–6,300 square yards of saleable plots. For market context, see open plots in Shadnagar and agriculture land in Shadnagar.

Worked example 2: a farmhouse already built near Moinabad

A Hyderabad family bought one acre near Moinabad in 2016 and built a 2,500 sq ft weekend house on it without conversion or building permission. They now want to sell, and buyers' lawyers are asking for the conversion order.

• The problem. The house sits on agricultural land on record. A resident buyer can still buy the acre as agricultural land at the Tahsildar office, but no bank will lend, an NRI cannot buy it, and the structure has no permission.
• The route. Check zoning first. Moinabad villages were covered by GO 111 until its repeal in 2022, and what can be built there now depends on the replacement rules; see our guide to GO 111 and its repeal. If the use is permissible, apply for conversion with the penalty for unauthorised use, then seek regularisation or permission for the structure from the competent authority.
• The cost. On an assumed basic value of ₹40 lakh per acre and a 3% rate, the fee would be ₹1.2 lakh plus a 50% penalty of ₹60,000, before any building regularisation charges. Small next to the value it unlocks, but it takes months.

For local land context, see agriculture land in Moinabad.

What happens if you build without conversion

We meet this regularly on the fringes of Hyderabad: houses, farmhouses, function halls and sheds on land that was never converted. The consequences build up over time.

• Penalty on conversion. Regularising later costs the conversion fee plus the penalty.
• No building permission. The local body or authority cannot permit a structure on unconverted land, so the building is unauthorised and exposed to notices.
• No bank finance. Neither you nor a future buyer can borrow against it.
• Restricted buyer pool. NRIs and OCIs cannot buy it; many resident buyers will not.
• Utility and tax complications. Connections may be on agricultural tariffs, and property tax assessment may not match the actual use.
• Regularisation schemes are uncertain. Telangana has run schemes such as LRS for plots and building regularisation schemes in the past, but their timing and terms are not predictable. See our guide to LRS for unapproved plots.

How a plot buyer verifies NALA status

Most buyers never apply for conversion themselves. They buy a plot or villa in a layout and need to know that the conversion behind it is real and covers their land. This is the check we run.

1. Get the conversion order number and date. Ask the developer for the order, not a receipt for the application. Orders from 2020 to 2025 were issued through Dharani; later ones through Bhu Bharati.
2. Match survey numbers and extents. A layout is often assembled from several survey numbers owned by different farmers. Every survey number in the layout should have its own conversion order, and the extents should add up to the layout area.
3. Check the live record. The survey numbers should show as converted for non-agricultural use, not as agricultural land still standing in the original farmers' names.
4. Tie conversion to the layout permit. The layout permit number from HMDA, DTCP or the development authority should refer to the same survey numbers. A conversion order without a layout permit means the land is converted but the plots are not approved.
5. Confirm your plot is released. Developers mortgage a share of plots to the authority until works are complete. Your plot number must not be on the mortgage list, or the mortgage must have been released.
6. Confirm registration at the SRO. If the developer proposes to register your "plot" at the Tahsildar office, it is still agricultural land. Stop and ask why.

Developers in good standing hand over all of this without fuss. Hesitation to produce the conversion order is itself information.

Conversion by intended use: what differs

Residential layouts

The most common case on the fringes of Hyderabad. Conversion is followed by a layout application in which roads, open space, social infrastructure sites and plot sizes must meet the authority's rules, and road widths tie into the master plan network. Converting only the plotted area and leaving roads as agricultural land is not how it works; the whole layout area is converted.

Single farmhouses and villas

Owners who want one house on a larger parcel can convert the house footprint and its surroundings rather than the whole holding, leaving the rest in agricultural use. The building permission then follows for the converted portion. This keeps the remaining land under the agricultural regime, which suits families who farm or keep orchards.

Commercial, industrial and institutional uses

Warehousing near the ORR and highways, schools, hospitals and resorts need conversion and then use-specific clearances: fire safety, pollution control for industry, and sometimes highway authority access permission. The planning authority checks that the zoning allows the use. Industrial land in notified industrial parks is usually allotted by the state industrial corporation and follows its own process.

After conversion: what changes for the owner

Once converted, the land is treated as non-agricultural for revenue purposes. Sale deeds register at the jurisdictional Sub-Registrar Office, stamp duty is computed on the non-agricultural market value, which is usually higher, and the 1% TDS under Section 194-IA applies to sales of ₹50 lakh and above because the land is no longer rural agricultural land. Converted land can be bought by NRIs and OCIs, subject to layout and building approvals. Conversion is effectively one-way; plan accordingly, because the land loses agricultural-only benefits and capital gains on it are taxed like any other property. Our guide to stamp duty and registration charges covers the change in registration costs.

Mistakes we see in practice, and the fix

1. Converting before checking zoning. The fee is paid, the order issues, and the layout is refused because the land is in a conservation zone or buffer. Fix: confirm master plan land use and buffers before applying.
2. Conversion order for the wrong extent. The order covers 1 acre 10 guntas, but the layout is drawn on 1 acre 30 guntas. Fix: reconcile the order, the record and the survey sketch before the planning application.
3. Buying a "converted" plot without seeing the order. Sellers say "NALA done" when only an application was filed. Fix: ask for the conversion order and check it against the live record.
4. Assuming conversion equals approval. A NALA order alone does not make a plot buildable. Fix: insist on the layout permit number from HMDA or DTCP as well.
5. Applying with a record that has errors. Wrong extents or names stall the application. Fix: correct the record first; see our guide to Dharani and Bhu Bharati land records.
6. Building first and converting later. It works out costlier and slower. Fix: convert and obtain permission before construction.
7. Ignoring access. Land without legal road access gets converted but cannot be laid out. Fix: secure a registered right of way or a public road frontage first.

A note for NRIs and OCIs

NALA status is the dividing line for NRI buyers. Under FEMA, NRIs and OCIs cannot buy agricultural land, plantation property or farmhouses, but they can buy residential and commercial property. A plot in a converted layout with HMDA or DTCP approval, registered at the Sub-Registrar Office, is residential property. A gunta-sized "farm plot" in an unconverted venture, or a "farmhouse" on unconverted land, is not, however it is marketed, and buying it is a FEMA contravention.

NRIs who have inherited farm land can apply to convert it, through a resident attorney under a specific power of attorney, if they intend to develop it or sell it as non-agricultural land. Once converted, the land can be sold to any buyer permitted to hold residential property, including other NRIs, and sale proceeds can be repatriated within the RBI limits after tax. Take advice from a CA on capital gains and from an advocate on the POA before starting. Our NRI investment guide for Telangana sets out the wider framework.

How NRR Estates handles conversion for clients

• Feasibility first. We check the record, title, zoning, lake buffers, road access and any GO-specific restrictions before a rupee is spent on fees.
• Application management. We coordinate the survey sketch, documents, online application and fee payment, and track the inquiry to the order.
• Buyer-side verification. When clients buy converted or approved plots, we verify the conversion order, the layout permit and the mortgage release against the specific plot.
• Development planning. For landowners, we work out the saleable area after roads and open space and the realistic timeline to approval.
• Regularisation cases. For existing structures on unconverted land, we work with our panel advocates on the cleanest legal route.

Our fees are disclosed in writing before you commit. We are property advisors, not lawyers; conversion orders and disputed records are handled with our panel advocates.

NALA conversion in Telangana: frequently asked questions

What is NALA conversion in Telangana?

NALA conversion is the permission to use agricultural land for a non-agricultural purpose, such as a house, layout, commercial building or industry, granted under the Telangana Agricultural Land (Conversion for Non-Agricultural Purposes) Act, 2006 on payment of a conversion fee. Once the order issues, the record shows the land as converted, sales register at the Sub-Registrar Office instead of the Tahsildar office, and the land becomes eligible for layout and building approvals, provided the master plan zoning allows the intended use.

How much is the NALA conversion fee in Telangana?

The fee is a percentage of the basic value of the land, meaning the government market value fixed by the Registration and Stamps Department, not the price you paid. As of October 2026 the rate commonly applied is about 2% to 3% of basic value depending on location, with higher rates in urban development areas. If the land is already in non-agricultural use without permission, a penalty, commonly 50% of the fee, is added. Verify the current percentage for your village before you budget.

How long does NALA conversion take?

Typically 30 to 90 days from a complete application to the conversion order, as of October 2026. Timelines stretch when the land record has errors, when the extent applied for does not match the survey sketch, when no-objection certificates are needed near water bodies, or when the field inquiry is delayed. Preparing the record, survey sketch and title documents properly before applying is the most effective way to shorten the process. Layout approval after conversion takes several more months.

Can I build a farmhouse on agricultural land without NALA conversion?

A farmer's own dwelling and farm structures ancillary to cultivation are generally treated as agricultural use, but a weekend farmhouse or villa for non-farming owners is usually a residential use that needs conversion and building permission. Building without them leaves the structure unauthorised, blocks bank loans, rules out NRI buyers and attracts a penalty when you later convert. Check the local position and zoning before construction, particularly in villages formerly covered by GO 111.

Does NALA conversion mean my plot is approved?

No. Conversion only changes the land's classification for revenue purposes. A plot becomes approved when the layout is sanctioned by HMDA, DTCP or the relevant development authority, which issues a layout permit number, and when the plot is released from the mortgage the developer gives the authority. Buyers should see the conversion order, the layout permit and the release status for their specific plot. A seller saying NALA is done is not the same as an approved layout.

Who applies for NALA conversion, the buyer or the seller?

The pattadar recorded on the land applies, so for a layout it is the landowner or developer who holds the land. A buyer of an individual plot in a layout should never need to apply; conversion should already be complete. If you are buying agricultural land intending to convert it yourself, the conversion happens after the land is mutated into your name. NRIs cannot buy agricultural land to convert it, but can convert land they have inherited, through a resident attorney.

Can NRIs buy NALA-converted land?

Yes. Converted land laid out under an approved layout is residential or commercial property, which NRIs and OCIs can buy under FEMA without RBI permission. What they cannot buy is agricultural land, plantation property or farmhouses, which includes unconverted farm plots sold in guntas. Before paying, an NRI buyer should confirm the conversion order covers the survey number, the layout permit is valid, the plot is released from mortgage and the sale will register at the Sub-Registrar Office.

What happens if the land is in a conservation zone?

Conversion will not make it buildable. NALA is a revenue permission and does not override the HMDA master plan or a district development plan. If the land is zoned for conservation, recreation or agriculture, or falls in a lake full tank level or buffer, the planning authority will refuse a residential layout or building even if the conversion fee has been paid. Always check master plan land use and buffers before applying, and before buying land on the promise of future conversion.