A Guide to Agriculture Land Laws for Non-Residential Indians.

Retiring amidst the farmlands and becoming a farmer is the dream of many Non-Resident Indians (NRIs), a dream that some are able to turn into reality. These NRIs, including Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs), often spend the majority of their time living outside India due to employment opportunities or being the children of NRIs. Consequently, while earning in foreign countries, many individuals decide to invest their funds in their home country, with the most appealing investment often being the purchase of land and property. This guide aims to provide essential insights for a seamless procedure.

In India, generally, Lands are zoned using scientific methods adopted by the local Government to oversee development and use of real estate in specific region. This zoning is as follows – 1. Residential 2. Commercial 3. Industrial 4. Agricultural 5. Recreational 6. Public Use 7. Infrastructure Development.

Can a NRI buy agricultural land in India?

NRI cannot buy agricultural land in India if you do so the FEMA authorities could send you a notice and your land can be confiscated by the government and they can even charge you with a fine. NRI can only inherit agricultural land from a family member.

Can you gift agricultural land to your Non – Indian partner/ sibling/Heir??Can you as a Non-Indian accept a gift of agricultural land?

NRI cannot buy agricultural land in India if you do so the FEMA authorities could send you a notice and your land can be confiscated by the government and they can even charge you with a fine. NRI can only inherit agricultural land from a family member.

Inheritance of Agricultural Land for NRI

According to the 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 special permission from the Reserve Bank of India (RBI).

?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 get permission from the RBI to buy agricultural land?

Yes, Many do!!

All requests for the acquisition of agricultural land/plantation property/farmhouse by any person resident outside India or foreign nationals may be made to The Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division (III), Mumbai 400 001.

Acquisition and transfer of immovable property by Indian residents outside India and Non-residents in India are regulated in terms of sub-section (3), (4) and (5) of section 6 of the Foreign Exchange Management Act, 1999 (FEMA) read with 1Notification No. FEMA 7(R)/2015-RB dated January 21, 2016, and Notification No. FEMA 21/2000-RB dated May 3, 2000, respectively. These Regulations are amended from time to time to incorporate the changes in the regulatory framework and published through amendment notifications.

What documents should we check before buying any land?

Once you decide to buy a plot, make sure you have all the documents in place. Without these, your purchase will be delayed. Having all the proper legal documentation will help protect your land and home from any disputes in the future. You can consult a lawyer to help you with every step of the documentation process.

Most of the required documents can be grouped into two types - legal and personal. Legal documents: These documents are essential, and missing even one of these can delay purchase. Most important is Mother Deed: This is taken from the seller. The Mother Deed is the main document needed.

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 specific regulations such as special permissions from RBI. ?The RBI will consider this on a case-by-case basis.

Gift of Agricultural Land to NRI and vice versa

An NRI or OCI can receive an agricultural/ plantation property or a farmhouse as a gift from a Resident Indian by way of inheritance, but an NRI can’t give such properties to other NRIs as gifts. An NRI can only give such properties to a Resident in India as gifts.

In easy terms:

Resident Indian to NRI gift of property - Yes;

Can be gifted NRI to Resident Indian gift of property - Yes;

Can be gifted NRI to NRI gift of property - No; Can’t be gifted

Note: Property here refers to agricultural land, plantation property, and farmhouses. Also, consider the Benami Act while gifting properties. Sale of Agricultural Land by NRI NRIs and OCIs can sell agricultural land, plantation property, or a farmhouse only to a Resident Indian. For the lands purchased with permissions from RBI, special approvals are required to complete sales transactions. The proceeds from the property need to be deposited in the NRO Account of the NRI.

The maximum amount that can be remitted from an NRO Account is US$ 1 million. The process of repatriation is the same done for outward remittances involving forms 15CA and 15CB.

In addition to these, other documents like a will, legal heir certificate, death certificate (in case of inheritance), and sale agreement (in case of sale) Taxation on Agricultural Land for NRI The taxation on the sale of agricultural land is different for rural and urban areas. Rural agrarian lands are not capital assets therefore no capital gains tax is applicable whereas in the case of urban agricultural land capital gains tax is applicable.

Buying Agriculture land, in other people’s names?

?Benami Transactions - Buying properties is in itself a complex job. 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. Buying and selling NRI agricultural land involves a lot of permissions and regulations that need to be taken care of.

Can OCI buy agricultural land?

According to the 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 special permission from the Reserve Bank of India (RBI).

Can NRI sell an inherited property in 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). I hope Most of the Questions are Answered!!

Summary-

Guidelines for Purchase of Agriculture land, Plantation property and farmhouses and documents to be submitted to RBI.

1. prior permission from RBI.

2.????Payment can be made in INR or Foreign currency.

3.????Copy of sale deed or documents of title.

4.????Source of funds used for the purchase.

5.????Evidence that land is not being used for prohibited purposes by State and Local Government

6.????Evidence that land is being purchased without the intention of speculation

7.????Evidence that land is not of commercial purpose or is not used for it.

8.????A Declaration that the land is not being bought with the intention of reselling it within 2 years of its purchase.

9.????Evidence that land is not being used for any agricultural purposes.

10.?Provide a copy of the documents of title to state government where land is situated.

The Non-Resident Indian (NRI) is also required to meet any additional requirements set by the State Government governing the area where the land is situated.

Other Considerations -

Land laws are state-specific and so in Many states,

1.?????you require a Farmer's license; Or, You should have a farmer status to buy farmland. They are also known as AGRICULTRIST.

2.????Having the status of a farmer is contingent upon having an agricultural background. This necessitates owning current agricultural land or providing evidence of a connection to a farmer, or demonstrating employment as an agricultural laborer on a farm.

In conclusion, purchasing and selling agricultural land as an NRI involves complex regulations and permissions that must be carefully managed to ensure compliance with Indian law. It's advisable to seek legal counsel and adhere to the guidelines provided by relevant government bodies and the Reserve Bank of India.