Can an NRI inherit agricultural land in India?

Can NRI inherit agricultural land in India?

Yes. FEMA allows a person resident outside India to acquire immovable property, including agricultural land, by inheritance from a person resident in India. This applies whether the heir is an NRI, an OCI cardholder or a foreign citizen such as a US citizen.

Can NRI receive agricultural land as a gift?

No. A gift of agricultural land, plantation property or a farmhouse to an NRI or OCI is not permitted. Only inheritance, by will or by succession law, is allowed.

Mutation of inherited agricultural land

1. Death certificate and proof of heirship.
2. Application to the revenue office for mutation.
3. Notice to other heirs and objections, if any.
4. Mutation entry in the land records in the heirs' names.

Settling shares among heirs

Heirs often agree that one person takes the land. Others can give up their shares by a registered release deed, or the land can be partitioned. An NRI heir can sign these before an Indian mission or a notary with apostille.

Tax on inherited farmland

Inheritance itself is not taxed in India. When the land is sold, capital gains are worked out using the cost to the previous owner. Rural agricultural land outside notified limits is not a capital asset for income tax, so its sale may not attract capital gains tax; check with a tax adviser for your land.

Partition among NRI and resident heirs

When some heirs live in India and others abroad, the usual choices are a partition that gives each heir a defined portion, a release by some heirs in favour of others, or a sale to a resident Indian citizen with the price divided. A registered partition or release deed signed by everyone avoids later disputes, and NRI heirs can sign theirs abroad.

State tenancy rules and inherited farmland

Some states restrict who may hold or buy agricultural land, often limiting purchases to agriculturists. Inheritance is generally treated differently from purchase, but a later sale must follow the state's rules on eligible buyers. Check the state law before agreeing any sale.

Documents needed for mutation

• Death certificate of the owner.
• Proof of heirship, or the will and probate where relevant.
• Latest land records extract.
• Identity documents of the heirs and any power of attorney.

NRI inherited agricultural land sale

Inherited farmland can be sold only to a resident Indian citizen. Proceeds go to the NRO account and can be repatriated within the annual limit, with the required forms. See farmland NRIs already own and inheritance without a will.