Who can buy agricultural land in India?
Eligibility to purchase agricultural land varies across States. Many States permit only farmers or individuals recognised as agriculturists to buy agricultural land, while some allow non-farmers to purchase under specific conditions.
States such as Maharashtra, Gujarat and Himachal Pradesh restrict the purchase of agricultural land to State-based agriculturists or individuals with an agricultural background. To be recognised as an agriculturist, a person must be actively engaged in farming, as demonstrated through landholding records or agricultural income.
What is the process of buying agricultural land?
The purchase process generally involves the following steps:
- Check buyer eligibility and applicable State laws, as several States restrict purchases to recognised agriculturists.
- Measure the land through a licensed surveyor and ensure the area matches the title certificate.
- Verify key documents, including the title deed, release certificate, property tax receipts, sale deed and agreement of sale. Buyers are advised to engage a property lawyer for document verification.
- Pay the applicable State-specific stamp duty and complete registration at the sub-registrar’s office.
- Apply for mutation of land records to update ownership with the local authorities.
Which documents should buyers verify?
Before purchasing agricultural land, buyers should obtain and verify the following documents through the Tehsildar Office, local revenue department or the relevant government authority:
- Title deed
- Sale agreement
- Stamp duty records
- Registration documents
- Property tax receipts and bills
- Encumbrance certificate
- Land measurement certificate
- Power of attorney, where applicable
For purchases in Maharashtra and Gujarat, buyers should also verify the 7/12 and 8A extracts. The 7/12 extract contains details such as land ownership, total area, cultivation type and encumbrances, while the 8A extract provides information on landholding and cultivation rights.
Can NRIs buy agricultural land in India?
Under the Foreign Exchange Management Act (FEMA), 2000, Non-Resident Indians (NRIs) cannot directly purchase agricultural land in India.
However, agricultural land may be acquired by an NRI through:
- Inheritance from a resident Indian relative.
- Gift from a resident Indian relative.
- Special approval from the Reserve Bank of India (RBI), which is granted only in limited cases after scrutiny of FEMA compliance and State land laws.
What legal precautions should buyers take?
Before purchasing agricultural land, buyers should:
- Verify the seller’s ownership and ensure the title is clear and free from encumbrances.
- Confirm their eligibility to purchase agricultural land under the applicable State law.
- Check that the land is designated for agricultural use and obtain required permissions if conversion is planned.
- Verify all relevant documents, including the sale deed, mutation certificate, land revenue receipts and property tax records.
- Get the land surveyed to confirm its size and boundaries.
- Seek assistance from a qualified property lawyer for legal due diligence.
- Pay the applicable stamp duty and complete registration at the sub-registrar’s office.
- Ensure there are no pending property tax liabilities or legal dues before completing the transaction.
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