Can i buy agricultural land in india

The taxation on sale of agricultural land is different for rural and urban areas. Rural agricultural lands are not capital assets therefore no capital gains tax is applicable whereas in case of urban agricultural land capital gains tax is applicable.

Buying properties is in itself a complex job. Buying a property in the name of someone else is considered illegal under the Benami Act. Buying and selling of NRI agricultural land involves a lot of permissions and regulations that need to be taken care of.

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There is no restriction for NRIs and OCIs to get agricultural land , plantation property, or farmhouse as a gift from the person resident in India.

An NRI has to gift it to a resident citizen of India. NRIs can sell agricultural land , plantation property, or farmhouse property provided the buyer is a citizen of India and resides in India. The sales proceeds can be remitted to an NRO account.

The repatriation process requires some documentation. The bank requires the submission of Form 15CA and Form 15CB , Will, legal heir certificate, and death certificate in case of inheritance , and sale agreement in case of sale. Rural agricultural land is not a capital asset hence capital gains tax is not applicable. However, if the agricultural land is defined as urban agricultural land , it is chargeable under capital gains tax.

An NRI cannot buy agricultural land in the name of another person unless that person is a spouse, brother, sister, or lineal ascendant or descendant. It will be considered a Benami transaction which is illegal. An NRI gives money to a friend or a son-in-law. This person uses the money to buy land, and the gains from that land are passed to the NRIs.

This is a Benami transaction, and the persons involved in it are punishable by law. Land transactions can be tricky. The rules are different in different states. You have to research and understand factors like the legitimacy of land, compliances to be followed, etc.

It might be better to consult a real estate lawyer before entering into the transaction. Schedule a call. If you have any questions or you are aware of NRI agricultural land issues — add them in the comment section. Hemant is also a member of the Financial Planning Association, U. See also: Local land measurement units in India. Even though the benefits of buying a land parcel or plot are innumerable, especially if it is an agricultural land, there are certain risks involved in such purchases, as well.

While states have made it easier for investors to find all land-related information online, a great deal of diligence has to be employed, to ensure that all the documents are in place and there is no forgery.

Evaluate other applicable laws pertaining to the transfer of the rights to the land, ownership records of the land and leases, if any. Often, such plots of agricultural land may not be transferrable.

The land may also be a leased one. In such cases, make sure that the tenants do not have any rights over the land and only enter into the transaction, after all such issues are cleared. See also: Legal tips for buying agricultural land in India. Here is a list of document that you need, to buy agricultural land. This may vary as per the state:. Investors in this segment, are either buying dry converted rural land, or are buying land through resale.

While the value is still lower than land plots in the city area, these investors become owners of land in a rural area. This way, they become eligible for buying more actual agricultural land. Some people also buy a small piece of residential property in a village and use this residential address, to buy an agricultural land within the same village. Prices of agricultural land are expected to increase, especially around urban areas, owing to the growing demand for affordable housing, which is only feasible along the outskirts of metro cities.

Land in such areas is also in demand, for public and private projects, adds Gaurav. Nevertheless, you will need to spend a substantial amount to buy the land and hence, you should cover all the risks, before you enter the deal. There are several reasons and opportunities for the agro realty sector to boom in India.

Since most companies use extensive chemicals on food products, especially perishable ones, people are trying to shift to consuming organic products that have less artificial chemicals. This is because such chemicals often cause health and environmental impacts. Such concerns have risen rapidly amidst the pandemic and people have shifted to consuming healthier food items.

Thus, this holds a lot of opportunity for organic farming, thereby increasing the investments in agricultural land. It is also expected that the market share of organic food and beverages would reach USD , in and individuals even with moderate personal disposable income would shift to consuming organic items and lead a more sustainable life.

Thus, investing in agricultural lands have recently grown beyond expectations in India along with increasing opportunities for organic farming. The following are the benefits of investing in the agro realty sector-.

Investors who are considering buying an agricultural property in rural areas around the city, may find this opportunity very lucrative as, now, a number of state governments are opening up farm lands for housing development and industrial purposes. Recently, the state government of Gujarat announced that real estate developers will be allowed to purchase agricultural land for affordable housing under the Gujarat Tenancy Act.

Similarly, in Karnataka, the state government passed amendments to the land reforms act that liberalised farmland ownership and extends the facility to buy agricultural land by a non-agriculturist. This could just be a start and very soon, other states may open up farm lands for real estate construction, resulting in more supply and maybe, cheaper homes. Investing in agricultural land is capital-intensive. Therefore, investors should have a clear financial plan in mind, before investing in agricultural land.

Also, it is imperative that investors keep realistic expectations from their investment, as the returns from farmland is not as attractive as believed. Usually, agricultural land is considered a good investment for high net-worth individuals and for those with surplus income. For salaried or self-employed individuals, living in cities, going through all this process will be time-consuming and tiresome.

Even though property appreciation has remained highly affected, because of the Coronavirus pandemic that broke out towards the end of , its impact on land values has been limited. This is because of the scarcity of land in developed areas and also because this asset does not undergo any depreciation.