Amendment in General Financial Rules, 2017 – Rule 310 Transfer of Land: Department of Expenditure, Finance Ministry Office Memorandum dated 05.05.2026
No.15(04)/2021-E.II(A)
Government of India
Ministry of Finance
Department of Expenditure
Kartavya Bhawan-1, New Delhi
Dated: 05.05.2026
OFFICE MEMORANDUM
Subject: Amendment in General Financial Rules, 2017 – reg.
It has been decided with the approval of Finance Minister to make following amendment in the General Financial Rules, 2017:
| Existing Rule | Amended Rule |
| Rule 310 (1) Transfer of Land. Transfer of land from a Union Territory to a Central Government Department (i:e. Ministry or Department of the Union Government including Defence, Railways, and Posts and Telegraphs) or vice versa shall be on ‘no profit no loss’ basis.
Rule 310 (2) Transfer of land from one Department of the Government (as defined in Rule 309) to another shall be on ‘no profit no loss’ basis. ‘No profit no loss’ as indicated at rules 310(1) and 310(2) above does not necessarily mean transfer being affected with ‘zero cost’. Transfer can be on the basis of mutually agreeable terms and conditions or in exchange for equal value land or payment of value of land or cost of acquisition. Rule 310 (3) Transfer of buildings and superstructures on land shall be treated similar to transfer of land. Transfer of buildings and superstructures on land vide above shall be at the present-day cost minus depreciation of these structure(s) standing on the land. Valuation for this purpose shall be obtained from the Central Public Works Department at the time of transfer. Rule 310 (4) The allotment of land to, and recovery of cost of buildings from the Public Sector Undertakings shall be at ‘market value’ as defined in paragraph – 2 of Appendix – 7. Rule 310 (5) The transfer of land and building between the Union and State Governments shall be regulated by the provisions of Articles 294, 295, 298 and 299 of the Constitution and subsidiary instructions issued by the Union Government which are reproduced as Appendix – 7. |
Rule 310 Transfer/alienation of Central Government’s land shall be governed as per the instructions placed at Appendix 7A & 7B of GFRs. |
| Appendix-7 – Transfer of Land and Buildings between the Union and State Government.
|
Appendix-7A – Guidelines for transfer/ alienation of Central Government land (new provision inserted).
Appendix-7B – Other constitutional provisions and subsidiary instructions issued by the Union Government for transfer of Land and Buildings between the Union and State Government. |
Article 294, as is evident, relates to succession to property, assets, rights, liabilities and obligations in certain cases only; Article 295 of the Constitution which relate to succession to property, assets, rights, liabilities and obligations in other cases, provides that- |
No Change |
| (i) As from the commencement of the Constitution:
(a) all property and assets which immediately before such commencement were vested in any Indian State corresponding to a State specified in Part -B of the First Schedule shall vest in the Union, if the purpose for which such property and assets were held immediately before such commencement will thereafter be purposes of the Union relating to any of the matters enumerated in the Union List; and (b) all rights, liabilities and obligations of the Government of any Indian State corresponding to a State specified in Part – B of the First Schedule, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations of the Union Government, if the purposes for which such rights were acquired or liabilities or obligations were incurred before such commencement will thereafter be purposes of the Union Government relating to any of the matters enumerated in the Union List: subject to any agreement entered into in that behalf by the Union Government with the Government of that State. |
No Change |
| (ii) Subject as aforesaid, the Government of each State specified in Part ‘B’ of the First Schedule shall, as from the commencement of the Constitution, be the successor of the Government of the corresponding Indian State as regards all property and assets and all rights, liabilities and obligations, whether arising out of any contract or otherwise, other than those referred to in Clause (1).
All property and assets, which include land and buildings, and which vest in the State Government under Articles 294 and 295 of the Constitution or otherwise shall be at the disposal of the respective State Governments, who will be at liberty to dispose them of by sale, mortgage, etc., and the proceeds thereof shall be credited to the revenues of the respective State Governments. From the commencement of the Constitution, the transfer of land between the Union and the State Government shall be regulated by mutual agreement except when they are acquired under some Act. The Union Government have laid down the following principles to be observed in regard to certain points:- |
No Change |
| (i) (a) When land belonging to a private party has to be acquired on behalf of the Union Government acquisition shall be at the expense of that Government. | No Change |
| (b) In cases where the Union Government require any land, which is in occupation of the State Government, to be transferred to them, the amount payable by the Union Government will ordinarily be the market value of the land and buildings, if any, thereon. | No Change |
| (c) The amount payable will include the capitalized value of land revenue assessable on the land when the transfer causes actual loss of land revenue to the State Government. | No Change |
| (d) Solatium of 15 per cent payable under the Land Acquisition Act will not apply to such transfers. | Solatium payable under the extant provisions of Land Acquisition Act will not apply to such transfers. |
| (ii) Land surplus to the requirements of the Union Government: – When the Union Government no longer required land in their possession, the Government of the State in which it is situated will be given the option of assuming possession of the whole or any portion thereof subject to the following conditions: –
(a) the Union government themselves shall be the judges of whether they require to retain any particular land or not; (b) if the State Government desire to assume possession of the land, the option to do so shall be exercised within six months of the date on which the Union Government signify their intention of surrendering the land; (c) the amount payable for the land will in all cases be its market value at the date of transfer; (d) when the State Government desire to assume possession of only a portion of the land surrendered, they shall be entitled to do so only if the value of the land as a whole is not materially reduced by the division; and (e) if the State Government do not desire to assume possession of any land on the foregoing terms, the Union Government will be free to dispose it of to a third party. Before, however, so disposing of the land, the Union Government will consult the State Government as to the levy of ground rent or assessment and the conditions, if any, subject to which it should be sold and they will, as far as possible, dispose of the land subject to the conditions which the State Government may desire to impose. The Union Government are not, however, bound to obtain the concurrence of the State Government in all cases, and in cases of disagreement the Union Government shall be the sole judge of the terms and conditions to be imposed. |
No Change |
| (iii) Determination of Disputes as to Titles. – Disputes as to title between the Union Government and a State Government shall be determined by the Supreme Court. | No Change |
|
Omitted |
2. This OM is also available on website of Department of Expenditure (www.doe.gov.in).
Sd/-
(Avinash K. Nilankar)
Director, E.II(A)
Tel: 2401-1985
Appendix – 7A
GUIDELINES
Transfer/Alienation of Central Government Land
Appendix – 7B
Other constitutional provisions and subsidiary instructions issued by the Union Government for transfer of Land and Buildings between the Union and State Government
These rules apply to the transfer of land and buildings between the Union and the State Governments and also to the surrender to the State Governments of land belonging to Railways.
The general position under Article 294 of the Constitution is that as from the commencement of the Constitution –
(a) all property and assets which immediately before such commencement were vested in His Majesty for the purposes of the Government of the Dominion of India and all property and assets which immediately before such commencement were vested in His Majesty for the purpose of the Government of each Governor’s Province, shall vest respectively in the Union and the corresponding State; and all rights, liabilities and obligations of the Government of the Dominion of India and of the Government of each Governor’s Province, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations respectively of the Government of India and the Government of each corresponding State subject to any adjustment made or to be made by reason of the creation before the commencement of the constitution of the Dominion of Pakistan or of the Province, of West Bengal, West Punjab and East Punjab.
Article 294, as is evident, relates to succession to property, assets, rights, liabilities and obligations in certain cases only; Article 295 of the Constitution which relate to succession to property, assets, rights, liabilities and obligations in other cases, provides that –
(i) As from the commencement of the Constitution:
(a) all property and assets which immediately before such commencement were vested in any Indian State corresponding to a State specified in Part -B of the First Schedule shall vest in the Union, if the purpose for which such property and assets were held immediately before such commencement will thereafter be purposes of the Union relating to any of the matters enumerated in the Union List; and
(b) all rights, liabilities and obligations of the Government of any Indian State corresponding to a State specified in Part -B of the First Schedule, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations of the Union Government, if the purposes for which such rights were acquired or liabilities or obligations were incurred before such commencement will thereafter be purposes of the Union Government relating to any of the matters enumerated in the Union List:
subject to any agreement entered into in that behalf by the Union Government with the Government of that State.
(ii) Subject as aforesaid, the Government of each State specified in Part ‘B’ of the First Schedule shall, as from the commencement of the Constitution, be the successor of the Government of the corresponding Indian State as regards all property and assets and all rights, liabilities and obligations, whether arising out of any contract or otherwise, other than those referred to in Clause (1). All property and assets, which include land and buildings, and which vest in the State Government under Articles 294 and 295 of the Constitution or otherwise shall be at the disposal of the respective State Governments, who will be at liberty to dispose them of by sale, mortgage, etc., and the proceeds thereof shall be credited to the revenues of the respective State Governments.
From the commencement of the Constitution, the transfer of land between the Union and the State Government shall be regulated by mutual agreement except when they are acquired under some Act. The Union Government have laid down the following principles to be observed in regard to certain points:
(i) (a) When land belonging to a private party has to be acquired on behalf of the Union Government acquisition shall be at the expense of that Government.
(b) In cases where the Union Government require any land, which is in occupation of the State Government, to be transferred to them, the amount payable by the Union Government will ordinarily be the market value of the land and buildings, if any, thereon.
(c) The amount payable will include the capitalized value of land revenue assessable on the land when the transfer causes actual loss of land revenue to the State Government.
(d) Solatium payable under the extant provisions of Land Acquisition Act will not apply to such transfers.
(ii) Land surplus to the requirements of the Union Government: – When the Union Government no longer required land in their possession, the Government of the State in which it is situated will be given the option of assuming possession of the whole or any portion thereof subject to the following conditions: –
(a) the Union government themselves shall be the judges of whether they require to retain any particular land or not;
(b) if the State Government desire to assume possession of the land, the option to do so shall be exercised within six months of the date on which the Union Government signify their intention of surrendering the land;
(c) the amount payable for the land will in all cases be its market value at the date of transfer;
(d) when the State Government desire to assume possession of only a portion of the land surrendered, they shall be entitled to do so only if the value of the land as a whole is not materially reduced by the division; and
(e) if the State Government do not desire to assume possession of any land on the foregoing terms, the Union Government will be free to dispose it of to a third party. Before, however, so disposing of the land, the Union Government will consult the State Government as to the levy of ground rent or assessment and the conditions, if any, subject to which it should be sold and they will, as far as possible, dispose of the land subject to the conditions which the State Government may desire to impose. The Union Government are not, however, bound to obtain the concurrence of the State Government in all cases, and in
cases of disagreement the Union Government shall be the sole judge of the terms and conditions to be imposed.
(iii) Determination of Disputes as to Titles – Disputes as to title between the Union Government and a State Government shall be determined by the Supreme Court.
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