Section 2: Exemptions from operation of Act

(1) Nothing in this Act shall apply to [the following; namely -:]¹

[(a) any building of which the Government or a local authority or a public sector corporation [or a Cantonment Board]² is the landlord; or ]³

(b) any building belonging to or vested in a recognized educational institutions, [***]⁴ ; or

[(bb) any building belonging to or vested in a public charitable or public religious institution;

(bbb) any building belonging to or vested in a waqf including a waqf-alal-aulad;]⁵

(c) any building used or intended to be used as a factory with in the meaning of the Factories Act, 1948 [where the plant of such factory is leased out along with the building]⁶ ; or

(d) any building used or intended to be used for any other industrial purpose (that is to say, for the purpose of manufacture, preservation or processing of any goods) or as a cinema or theatre, where the plant and apparatus installed for such purpose in the building is leased out along with the building:

Provided that nothing in this clause shall apply in relation to any shop or other building, situated within the precincts of the cinema or theatre, the tenancy in respect of which has been created separately from the tenancy in respect of the cinema or theatre; or

(e) any building used or intended to be used as a place of public entertainment or amusement (including any sports- stadium, but not including a cinema or theatre), or any building appurtenant thereto; or

(f) any building built and held [***]⁷ by a society registered under the Societies Registration Act, 1860, or by a co-operative society, company or firm, and intended solely for its own occupation or for the occupation of any of its officers or servants, whether on rent or free of rent, or as a guest house, by whatever name called, for the occupation of persons having dealing with it in the ordinary course of business.

[***]⁸

[(g) any building, whose monthly rent exceeds two thousand rupees;

(h) any building of which a Mission of a foreign country or any international agency is the tenant;]⁹

(2) [Except as provided in sub-section (5) of section 12, sub-section (1-A) if section 21, sub-section (2) of section 24, section 24-A, 24-B, 24-C or sub-section (3) of section 29, nothing in this Act shall apply to a building during a period of ten years from the date on which its construction is completed :]¹⁰

[Provided that where any building is constructed substantially out of funds obtained by way of loan or advance from the State Government or the Life Insurance Corporation of India or a bank or a co-operative society or the Uttar Pradesh Avas Evam Vikas Parishakd, and the period of repayment of such loan or advance exceeds the aforesaid period of ten years then the reference in this sub-section to the period of ten years shall be deemed to be a reference to the period of fifteen years or the period ending with the date of actual repayment of such loan or advance (including interest), whichever is shorter:]¹¹

[Provided further that where construction of a building is completed on or after April 26, 1985 then the reference in this sub-section to the period of ten years shall be deemed to be a reference to a period of [forty years]¹² from the date on which its construction is completed.]¹³

Explanation- [(1)]¹⁴ – [For the purposes of this section]¹⁵ --

(a) the construction of a building shall be deemed to have been completed for the date on which the completion thereof is reported to or otherwise recorded by the local authority having jurisdiction, and in the case of a building subject to assessment, the date on which the first assessment thereof comes into effect and where the said dates are different, the earliest of the said dates, and in the absence of any such report, record or assessment, the date on which it is actually occupied (not including occupation merely for the purposes of supervising the construction or guarding the building under construction) for the first time :

Provided that there may be different dates of completion of construction in respect of different parts of a building which are either designed as separate units or are occupied separately by the land lord and one or more tenants or by different tenants ;

(b) "construction" includes any new construction in place of an existing building which has been wholly or substantially demolished ;

(c) where such substantial addition is made to an existing building that the existing building becomes only a minor part thereof the whole of the building including the existing building shall be deemed to be constructed on the date of completion of the said addition.

[Explanation-II-- The expression ‘bank’ means –

(i) a banking company, as defined in the Banking Regulation Act, 1949;

(ii) the State Bank of India constituted under the State Bank of India Act, 1955;

(iii) a subsidiary Bank. as defined in the State Bank if India (Subsidiary Banks) Act; 1959;

(iv) a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970;

(v) a Financing Bank or Central Bank (as defined in the Uttar Pradesh Co-operative Societies Act, 1965), not being a Land Development Bank; and

(vi) an other financial institution notified by the State Government in the Gazette as a bank for the purpose of this Act.

Explanation-III-- A building shall be deemed to be constructed substantially out of funds obtained from sources mentioned in the proviso, if the funds obtained from one or more of such sources account for more than one-half of the cost of construction.]¹⁶

(3) [***]¹⁷