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Can NRI`s buy Agricultural Land in India?

For NRIs (Non-Resident Indians) wanting to invest in agricultural land in India, the process can be confusing and convoluted. An NRI can buy agricultural land, but there are certain rules and regulations that must be followed. It’s important to understand these rules if you’re considering buying agricultural land as an NRI. 

In this blog post, we will explore the steps involved with purchasing agricultural land as an NRI in India. We’ll look at the legal requirements, eligibility criteria, and other relevant information to help equip you with all the knowledge needed to make an informed decision before diving headfirst into a purchase.

Can NRIs get agricultural land by gift?

Yes, NRIs are allowed to gift agricultural land in India. The process is relatively simple and can be done by executing a gift deed. Gift deeds must be registered with the Registrar of Companies within 3 months of execution.

Can NRIs inherit agricultural land in India?

Yes, NRIs can buy agricultural land in India. However, there are restrictions on the type and size of agricultural land that NRIs can purchase. In addition, NRIs are not allowed to purchase agricultural land near urban areas.

Agricultural land is an important asset class in India and has been traditionally owned by farmers and passed down from generation to generation. The Indian government wants to ensure that this valuable resource is used for its intended purpose – farming – and therefore has placed restrictions on who can purchase agricultural land.

NRIs are only allowed to purchase small plots of agricultural land – typically less than 50 acres. In addition, the land must be located in a rural area, at least 3 kilometers away from any urban center. These restrictions are in place to prevent investors from buying up large tracts of farmland and converting it to other uses such as housing or commercial development.

 

The process of purchasing agricultural land in India as an NRI is similar to the process of purchasing any other type of property in India. You will need to engage the services of a local real estate agent and lawyer to help you with the paperwork and transaction.

From whom can NRIs inherit agricultural land?

The Agricultural Land (Ceiling and Holdings) Act, of 1960 lays down the ceiling limit on the land that can be owned by an individual in a particular state. The ceiling limit is different for different states. An NRI cannot inherit agricultural land if he/she exceeds the ceiling limit set by the state government.

What can NRIs do with inherited agricultural land in India?

If you are an NRI and have inherited agricultural land in India, there are a few things you can do with it. You can:

  1. Sell the land – You can sell inherited agricultural land in India just like any other property. You will need to get the appropriate approvals from the relevant authorities, but once that is done, you can put the land on the market and find a buyer.
  2. Lease the land – Another option is to lease the agricultural land out to farmers or other interested parties. This can be a good way to generate income from the property without having to sell it.
  3. Develop the land – If you have the resources, you could develop the inherited agricultural land into something else, like a housing complex or commercial center. This would require getting approvals from local authorities, but it could be a lucrative endeavor if done correctly.
  4. Use it for your own farming – Finally, if you are interested in farming yourself, you could use the inherited agricultural land for that purpose. This would involve getting all of the necessary approvals and permits, but it could be a great way to connect with your roots and get back to nature.

Tax implications for NRIs selling inherited agricultural land in India

If you are an NRI selling agricultural land that you have inherited in India, there are a few things to keep in mind from a tax perspective. First of all, if the land was inherited by you before April 1, 2017, then any gains from the sale of the land will be taxed at the rate of 20%. However, if the land was inherited by you on or after April 1, 2017, then the gains from the sale of the land will be taxed at the rate of 30%. Additionally, if you have owned the agricultural land for less than two years at the time of sale, then it will be considered a short-term capital asset and taxed accordingly. Finally, keep in mind that if you are an NRI selling agricultural land located in a rural area, you may be eligible for a lower tax rate under the “rural housing” provisions.

Can the inherited agricultural land be converted to commercial or residential land?

It is possible to convert agricultural land into commercial or residential land, but there are a few restrictions.

 

The first restriction is that you must be the owner of the property at the time of conversion. If you are not the owner, you may need a mortgage from an Indian bank in order to purchase it.

 

The second restriction is that you must be able to prove that you have been paying taxes on your land for at least seven years before your request for conversion.

 

Finally, the third restriction is that you must have lived in India for at least five years before your request for conversion.

 

The conclusion is that NRIs can buy agricultural land in India, but it depends on the region.

 

There are different rules for buying agricultural land in each part of India, and the rules are different for different types of land. For example, you cannot buy forest land unless you have a license from the government to do so. You also cannot buy riverbank land without a license from the government.

 

The most important thing to remember when buying agricultural land in India is that it must be registered with your local government as soon as possible after you purchase it. If you fail to do this within a certain amount of time (usually around two years), then your property rights may be terminated or invalidated.