- NRIs cannot buy agricultural land or receive it as a gift.
- Farmland bought while resident can be kept after becoming an NRI.
- It can be leased out, subject to state tenancy laws.
- It can be sold only to a resident Indian citizen.
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Can NRI buy agricultural land in India: the short answer
No. The Foreign Exchange Management (Non-debt Instruments) Rules, 2019 exclude agricultural land, plantation property and farmhouses from what NRIs and OCIs can acquire, by purchase or gift.
Land bought before you became an NRI
If you bought farmland while resident and later moved abroad, you can continue to hold it. You do not have to sell it, and its income is taxed in India as before.
Can you lease out farmland as an NRI?
You can let it be cultivated, but state tenancy laws can give long-term cultivators rights in the land. Use written arrangements, take advice on your state's law, and avoid situations where a cultivator can claim tenancy.
Looking after farmland from abroad
Keep the land records in your name up to date, pay any land revenue, and have someone you trust check the land and the records regularly. Unattended farmland is vulnerable to encroachment and to entries in the records that you only discover years later. A specific power of attorney limited to management is safer than a general one.
What if you return to India?
Once you become resident again, the FEMA bar on acquiring agricultural land no longer applies to you, though state laws on who may buy farmland still do.
Who can you sell it to?
Only to a resident Indian citizen. Sale proceeds go to your NRO account and can be repatriated within the annual limit. The buyer deducts tax at source.
Whether NRI can buy agricultural land in India through a relative
Buying in a resident relative's name for your benefit can breach FEMA and state laws on benami or agriculturist status. See penalty for NRIs buying agricultural land and inheriting agricultural land.
Founder and Managing Partner, VIVS Legal. BLS, LL.B, LL.M, PGDBM, JAIIB.
