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How To Buy Agricultural Land?

IndianMoney.com Research Team | Updated On Friday, March 09,2018, 01:26 PM
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How To Buy Agricultural Land?

 

You and other citizens who live in urban parts of India want to buy agricultural land. Agricultural land is much cheaper than land in cities and citizens expect to make good returns when they sell this land.But there's a problem. To buy agricultural land you must be a farmer. Simply speaking, almost all State laws in India allow only farmers to buy agricultural land.

So how to buy agricultural land in India? You need to be a farmer of course. To protect farmers, rules in each State in India, allow only farmers to buy agricultural land. If you are not a farmer, there are 2 ways you can purchase agricultural land. You need to show that your father or grandfather was a farmer. This is almost impossible. How will you change the profession of your father/grand father if they are not farmers?

The second way is to show you already own some agricultural land. You cannot convert fertile agricultural land (Wetlands) into residential/industrial land. Only dry agricultural land can be converted. You could buy dry converted agricultural land. You can also buy a small piece of residential land in a village and using this address, you can buy agricultural land within the same village.

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How To Buy Agricultural Land?

 

You and other citizens who live in cities want to buy agricultural land. Agricultural land can give good returns, if it is situated in an area where the Government has planned an Infrastructure Project for the future.

If the Government acquires your agricultural land plot, you get a higher compensation than urban land. Agricultural income is tax free in India.

 

Tips to buy agricultural land in India

 

1. Check Eligibility Norms: Check if you are eligible to buy agricultural land. Most States allow only agriculturists/farmers to buy agricultural land. States like Kerala and Tamil Nadu have no restrictions on investing in agricultural land.

NRIs (Non Resident Indians), PIOs (Persons of Indian Origin), OCIs (Overseas Citizens of India) and foreign citizens are not allowed to own agricultural land/Plantations/Farm Houses. They can inherit agricultural land.

 

2. Take a look at land ceiling: Different States in India have different rules, regarding the maximum amount of agricultural land you can hold. The maximum amount of agricultural land that can be purchased in Tamil Nadu is 59.95 acres. In Maharashtra it is 54 acres and in Himachal Pradesh the maximum land ceiling limit is 32 acres. Remember: There are many sub-categories of agricultural land and maximum ceiling within each State varies from category to category.

 

3. Convert agricultural land: Agricultural land cannot be used for residential purposes unless converted. Conversion of wetland for commercial/residential purposes is not allowed in most states in India. You can convert agricultural land only if it is dry land. Before you start construction, you need to get the land use converted from agricultural land to residential land. Different States follow different procedures.

You have to seek approval from local authorities to get 'change of land use' from agricultural land to residential land. Apply to the commissioner of the land revenue department and explain the purpose of conversion. You have to pay fees to get the land converted depending on the nature of the land and its location.

 

4. Get past the legal hurdles: Check if the agricultural land is eligible for transfer. If the land is only leased, it may not be eligible for transfer. If land is Government-allotted land, you will require special permission to sell it.It is very important that the seller of the land has full right to transfer the property.

Let's say the owner of  the property is a minor and the guardian has sold this property (completed the land transaction on behalf of the minor). The guardian may not have had full rights to transfer this property. Tomorrow, the true owner (minor when he becomes a major), could challenge this sale.

What happens if you buy agricultural land without reading the rules? Many citizens have lost agricultural land bought on city outskirts, just because they were not familiar with rules and laws governing the purchase/sale of agricultural land. Government authorities seized this land. So read this article before purchasing agriculture land. Be Wise, Get Rich.

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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