Overseas Citizen of India : Converting farmland to residential for registration

Hi, This one is related to FEMA & OCI & Agriculture Land, and its associated tax or FEMA consequences. If you have direct experience on this matter, would love to hear your thoughts on this.

Status: OCI [Physical Resident: India, Tax resident: India & Foreign]
Situation: 
1) A friend is selling a small agriculture land, inside a large developing area, with a mix of agriculture land, residential, residential amenities etc. I need to be able to register that agri land in my name. What would be the process of converting that agri land into residential before I register? Current agri land cannot be registerd in an OCI name, according to FEMA. 

2) Once converted, & registered, since it will be in the middle of other agri land, does conversion to "residential" limit it from practically acting as a farmland (ie. growing agriculture produce on it)? 

3) In future, once I decide to sell it, are there any consequences of the fact that it was originally agri land? And I am guessing I am able to sell it to a resident or an NRI, at that point? 

Appreciate any thoughts on feasibility of above. If there are any red flags in executing above, would love to know. It would really help if you provide a reference to govt publications, so I can read the surrounding details as well. Thanks in advance. Regards.

Replies (2)
Quick Summary
This discussion explores the process for an Overseas Citizen of India (OCI) resident in India to convert agricultural land to residential use for registration. Key considerations include navigating FEMA regulations, obtaining necessary conversion orders and NOCs from local authorities, and understanding the implications for future use and sale. The feasibility of completing the conversion and registration as a single transaction is also discussed to ensure FEMA compliance.

Converting agricultural land to residential land and registering it in your name involves several steps. Since you're an OCI (Overseas Citizen of India), you'll need to consider FEMA (Foreign Exchange Management Act) regulations. Here's a general outline:

1. Check local zoning and land-use regulations: Ensure that the area is designated for residential use. 

2. Obtain a conversion order: Apply to the local authorities (e.g., Tehsildar or District Collector) for a conversion order, changing the land use from agricultural to residential. 

3. Get a No-Objection Certificate (NOC): Obtain an NOC from the local authorities, stating that the land can be used for residential purposes. 

4. Execute a sale deed: Purchase the land from your friend, and execute a sale deed in your favor.

 5. Register the land: Submit the sale deed, conversion order, and NOC to the Sub-Registrar's office for registration.

 6. OCI compliance: Since you're an OCI, you'll need to comply with FEMA regulations.

You may need to obtain a special permission or dispensation from the Reserve Bank of India (RBI) or the local authorities. 

Dear Sir, Your responses are clear and make sense. I had a small follow-up on point (5). So the registration of sale-deed & conversion of land to residential steps both can happen as a single transaction at sub-registrar? If that is possible, then I think FEMA should be okay too. Only if registration happens first and then conversion, as 2 separate steps, that will have FEMA problems from what I know. I will check with FEMA and local authority further as well. Appreciate your time and feedback! Regards.

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