Can NRI buy agricultural land in India?

Ca Anand Dubey | Last updated: 04 June 2022

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Quick Summary

Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) generally cannot purchase agricultural land, farmhouses, or plantation properties in India. While they can acquire other types of immovable property through specific banking channels or gifts from relatives, agricultural land is an exception. The primary way an NRI or OCI can obtain agricultural land is through inheritance. However, if acquired by inheritance, the property can only be sold to a resident of India.

In case of NRI, OCI, PIO it is being governed by Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018, section 3 of the act is recited as under:

3. Acquisition and Transfer of Property in India by a Non-Resident Indian or an Overseas Citizen of India:-

Can NRIs Buy Agricultural Land in India Rules Explained

An NRI or an OCI may

(a) acquire immovable property in India other than agricultural land/ farm house/ plantation property:

Provided that the consideration, if any, for transfer, shall be made out of (i) funds received in India through banking channels by way of inward remittance from any place outside India or (ii) funds held in any non-resident account maintained in accordance with the provisions of the Act, rules or regulations framed thereunder.

Provided further that no payment for any transfer of immovable property shall be made either by traveler’s cheque or by foreign currency notes or by any other mode other than those specifically permitted under this clause.

(b) acquire any immovable property in India other than agricultural land/ farm house/ plantation property by way of gift from a person resident in India or from an NRI or from an OCI, who in any case is a relative as defined in section 2(77) of the Companies Act, 2013;

(c) acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property (a) in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or (b) from a person resident in India;

(d) transfer any immovable property in India to a person resident in India;

(e) transfer any immovable property other than agricultural land/ farm house/ plantation property to an NRI or an OCI.

Going through the above it is clear that an NRI /OCI cannot buy Agricultural land/farm/property without prior approval from RBI, however, they can inherit the property. Further, NRI /OCI also can not acquire agricultural property through gifts. The only manner to acquire the agricultural property by NRI / OCI is Inheritance.

If an NRI /OCI acquire agricultural property through inheritance then they can sell it only to a resident.

There is also some restriction on the repatriation of sale proceeds of immovable properties.

The author can also be reached at ananddube07@gmail.com

FAQ :

No, NRIs and OCIs are generally prohibited from buying agricultural land, farmhouses, or plantation properties in India under the Foreign Exchange Management Regulations, 2018.

The only permitted way for an NRI or OCI to acquire agricultural land in India is through inheritance from a relative.

No, NRIs and OCIs cannot acquire agricultural property in India through gifts.

Yes, if an NRI or OCI acquires agricultural property through inheritance, they can sell it, but only to a person who is a resident of India.

NRIs and OCIs can acquire immovable property in India, excluding agricultural land, farmhouses, or plantation properties, provided the payment is made through specific banking channels like inward remittances or funds from a non-resident account.