Can we sell agricultural land in india to buy home

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Sale Of Agricultural Land NRIs

Non-resident Indian and person of Indian origin

Overseas Indians, officially known as Non-resident Indians or Persons of Indian Origin, are people of Indian birth, descent, or origin who live outside the Republic of India. Overseas Indians are various individuals or ethnic groups associated with India, usually through ancestry, ethnicity, nationality, cit…

can sell agricultural land, plantation property, or farmhouse property provided the buyer is a citizen of India and resides in India. If the NRIs have purchased such lands with permission from RBI, they require approval from RBI to complete a sale transaction.

One can also mortgage the property to an authorised real estate dealer or a financial institution dealing with home loans. However, if the property is an agricultural land or farming development, it can only be sold to a resident Indian citizen.

Full
Answer

Who can buy agricultural land in India?

In some states like Telangana, anyone can buy agricultural land, regardless of whether or not they are farmers. However in other states, like Karnataka, only registered farmers or those from farming families can buy agricultural land. Therefore, one should be aware of the rules in the state, prior to buying agricultural land.

Can NRIs own agricultural land in India?

Inheriting agricultural land is the only way NRIs can own agricultural land in India. From whom can NRIs inherit agricultural land? NRIs can inherit agricultural land, farmland, farmhouses, and/or plantations in India from a resident of India only.

Can agricultural land be converted to commercial or residential land?

However, converting agricultural land to commercial or residential land is, in itself, a lengthy and time-consuming process. It becomes all the more complicated in the case of NRI agricultural land ownership.

Is the taxation on sale of agricultural land different for rural areas?

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.

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How to convert agricultural land to residential land

An application form has to be submitted to the concerned authorities, clarifying the reason behind conversion. The necessary documents like sale de…


Who can buy agricultural land in India

In some states like Telangana, anyone can buy agricultural land, regardless of whether or not they are farmers. However, in other states, like Karn…


Is sale of agricultural land taxable?

Agricultural land in India is not considered a capital asset. Therefore, any gains from its sale are not taxable under the head Capital Gains.


Check the title deed of the agricultural land to verify the ownership

The land’s title deed confirms the seller’s name and checks whether the seller has a right to sell the property. Suppose the present title deed and the previous title deed have more than one owner for the existing agricultural land.


Verify the documents and sign a land sale agreement

After verifying all the documents, the seller and the buyer draft and sign a written document that mentions the advance payment amount, balance payment, and the actual sale period; all of this must be signed under a lawyer’s supervision and two witnesses. It is a pivotal part of buying agricultural land.


Find out the Stamp duty on the land

Stamp duty is another vital aspect of real estate purchase. Stamp duty is nothing, but the tax imposed by the government on a property, and the stamp duty imposed by the government on land varies from state to state. It is also a legal document that can be used in front of a court of law.


Required documents for the registration of the land

Registration of land is a document that states the transfer of property in the new buyer’s name and must be signed by both the parties at the Registrar’s office.


Collect the encumbrance and land measurement certificate

This document assures the buyer that the agricultural land is free from any legal hassles or complaints. One can obtain the Encumbrance certificate from the sub-registrar’s office.


Ensure there are no pending tax receipts and bills of land records

Before jumping to buy the property, the buyer must ensure no outstanding bills or notices relating to the land. They must check that the water, electricity, or other bills are all clear and updated.


Changing the title of the agricultural land

After getting done with the entire legal procedures and vital aspects of buying agricultural land, the name of the land’s new owner is added to the village office record.


Is there capital gains tax on agricultural land?

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.


Can NRIs give money outside India?

NRIs can sell an inherited property or gift the same and remit the money outside India. However, NRIs can give an inherited property as a gift only to an Indian resident or to another NRI/ Persons of Indian Origin (PIO) (apart from agricultural land).


Can an NRI give a farmland?

An NRI can only give such properties to a Resident India as gifts. In easy terms:


Can an NRI inherit land?

Inheritance of Agricultural Land for NRI. NRIs as well as OCIs can’ t directly buy agricultural land, plantation property, or a farmhouse in India but they can inherit it from a Resident Indian. An NRI can even inherit such properties from other NRIs subject to certain regulations such as special permissions from RBI.


Can an NRI gift land to an Indian?

NRI to Resident Indian gift of property. Yes; Can be gifted. NRI to NRI gift of property. No; Can’t be gifted. Gift of Agricultural Land to NRI and vice versa. Note: Property in the above table refers to agricultural land, plantation property and farmhouses. Also, consider the Benami Act while gifting properties.


Can an NRI buy a house in the name of another person?

An NRI can’t buy a property in the name of another person unless that person is a spouse, brother, sister or lineal ascendant or descendant. Buying a property in the name of someone else is considered illegal under the Benami Act.


Can NRIs buy farmland in India?

According to Foreign Exchange Management Act and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018, both NRIs and OCIs aren’t allowed to buy any agricultural land or plantation property or farmhouses in India by law unless they get a special permission from the Reserve Bank of India (RBI).


Can NRIs buy property in India?

The Reserve Bank of India (RBI) has given general permission to NRIs to acquire property in India. However, it does not mean that NRIs can buy any type of property. NRIs can only purchase commercial and residential properties in India.


Can NRIs transfer land to a permanent resident?

NRIs are allowed to transfer the ownership of the agricultural land by gift or by sale, but only to a permanent resident of India. In the case of the sale of the inherited agricultural land, there will be tax implications, as well.


Can NRIs inherit land?

NRIs can inherit agricultural land, farmland, farmhouses, and/or plantations in India from a resident of India only.


Can NRIs acquire land in India?

The answer to this, too, is no. NRIs cannot acquire agricultural land in India even by gift. While other types of properties can be acquired by the way of gift, this is not so for agricultural land.


Can inherited land be converted to commercial land?

Can the inherited agricultural land be converted to commercial or residential land? NRIs can get the conversion done to commercial or residential land after inheriting agricultural land in India. However, converting agricultural land to commercial or residential land is, in itself, a lengthy and time-consuming process.


Can NRIs buy farmland?

Regarding agricultural land, NRIs are NOT allowed to purchase agricultural land, farmland, farmhouses, or plantations in India.


Do NRIs have to pay taxes on land?

While NRIs don’t have to pay any tax on the inheritance of agricultural land, it will need to be paid on the sale. Capital gains tax is levied on the sale proceeds in such transactions. The earnings from such sales can only be remitted abroad after the payment of the due taxes.


Is it worth buying agricultural land in India?

Investment in agricultural land is capital-intensive. Investors have a clear financial plan in mind before investing in agricultural land. In addition, investors need to have realistic expectations of their investment, as the return on farming is not as attractive as it may seem. Agricultural land is a good investment in India.


Keep small things keep in mind when buying agricultural land

Make sure you are not buying disputed land – Other states in our country have different laws for buying agricultural land. Anyone is eligible to buy agricultural land in Telangana. But in Maharashtra and Karnataka only registered farmers are allowed to buy agricultural land. So, you know the principles of this state.


Advantages of buying agricultural land in India

Buying agricultural land has several advantages. But agricultural land laws vary from state to state. In some states, including Telangana, anyone can buy agricultural land, even if they are farmers, but in states like Karnataka, only registered farmers or those belonging to farming families can buy such land.


Documents required to purchase agricultural land in India

Here is a list of documents you need to purchase agricultural land. This may vary by state:


Mistakes to avoid while buying agricultural land

Check the title of the farmland, before buying it. This helps to avoid legal complications and also helps to get the land faster. Buyers should be aware of agricultural land laws. Buyers should make sure to physically verify the property and look at the details.


Agricultural land use in India

Land resources are more important for the livelihood of people dependent on agriculture;


Legal tips for buying agricultural land in India

Eligibility Criteria – Agricultural land purchase guidelines vary from state to state. The states of Gujarat, Rajasthan, Maharashtra, and Karnataka have some restrictions while anyone can buy agricultural land in Tamil Nadu.


Is agricultural land a capital asset?

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.


Can a farmer sell agricultural land?

He can hold or sell that agricultural land.


Can NRIs buy land in India?

Can NRI Purchase Agricultural Land In India. Under the Foreign Exchange Management Act and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018, NRIs and OCIs are not allowed by law to purchase land or plantation property, or farmhouses in India unless they acquire special permission from RBI.


Can NRIs get farmland?

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. (but consider Benami act)


Can an NRI buy land in the name of another person?

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. (please consult a good lawyer as our knowledge is limited in this)


Is land transaction difficult?

Land transactions can be tricky. The rules are different in different states. It might be difficult to have updated information as an NRI or OCI who is not always present in India. You have to research and understand factors like the legitimacy of land, compliances to be followed, etc. at the time of a property purchase and understand …


Can you buy farmland if you are an OCI holder?

You can sell inherited farmland but as an OCI holder you cannot buy.

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