Investing in land is seen as one of the safest and most reliable ways to build wealth in India. While residential and commercial real estate often get more attention, agricultural land has huge potential for farming, leasing, or future development.

However, purchasing agricultural land in India isn’t as simple as buying a house. It involves specific legal rules, eligibility requirements, and necessary steps.

What is Agricultural Land?

Agricultural land is primarily used for farming activities. This includes growing crops, gardening, dairy farming, and raising poultry. It is legally classified as non-urban land and zoned specifically for agricultural use.

Types of Agricultural Land in India  

• Crop-growing land: For seasonal or perennial crops.  

• Plantation land: Used for tea, coffee, rubber, and more.  

• Horticultural land: For cultivating fruits and vegetables.  

• Grazing land: For raising livestock.  

State laws regulate agricultural land, so the rules about ownership and usage differ from one state to another.

Eligibility Criteria to Buy Agricultural Land in India

Buying agricultural land is not open to everyone, especially in certain states. Eligibility is primarily governed by state-specific land reforms.

Maharashtra	Only an agriculturist or someone with an agricultural background
Karnataka	Agriculturists; non-agriculturists need state permission
Gujarat	Only farmers from Gujarat
Kerala	No restrictions on buying agricultural land
Punjab, Haryana	Open for purchase by Indian citizens
Tamil Nadu	No restriction for Indian citizens
Himachal Pradesh, J&K	Highly restricted for outsiders

Who is Considered an Agriculturist?

• Someone who already owns agricultural land.
• Someone who is engaged in farming activities for income.
• Someone whose ancestors or parents own agricultural land

Can NRIs Buy Agricultural Land?

According to RBI guidelines, Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) cannot buy agricultural land in India. 

However, NRIs can inherit agricultural land from their parents or other relatives, provided the original ownership was acquired under Indian law. While direct purchase is restricted, inherited ownership is legally permitted.

It is always advisable for NRIs to consult a legal expert before initiating any process related to agricultural land in India to ensure full compliance with FEMA and state regulations.

Key Steps in Buying Agricultural Land  

1. Check Eligibility  

Before proceeding, verify if you can legally buy agricultural land in the state. This includes checking:  

• Your agricultural status.  
• Any ceiling limits.  
• State-specific rules.  

2. Identify Suitable Land  

Work with a local broker or real estate agent, or look at government listings to find agricultural plots that are:  

• Fertile and irrigated.  
• Have road access.  
• Not involved in any land dispute.  

3. Verify Land Records and Ownership  

This is an important legal step. Ensure:  

• The title deed is clear.  
• The seller has complete ownership.  
• There are no pending loans, claims, or disputes.  
• Obtain the Encumbrance Certificate (EC) for the past 15 to 30 years from the sub-registrar.  

4. Check Land Conversion Status  

Make sure the land is legally classified as agricultural and not converted to residential or industrial. Also check:  

• Zoning laws from the local municipality.  
• Restrictions from the Land Ceiling Act.  

5. Survey and Demarcation  

Hire a surveyor to inspect and mark the land boundaries. This ensures:  

• The plot size matches the official records.  
• There is no encroachment.  

6. Agreement to Sell  

Draft a sale agreement that includes:  

• Buyer and seller details.  
• Price and advance amount.  
• Land description.  
• Time for registration.  

The agreement should be notarized.  

7. Get No Objection Certificates (NOCs)  

Depending on the state and type of land, you may need:  

• NOC from the local Gram Panchayat.  
• NOC from Agricultural Land Ceiling Authorities.  
• NOC from legal heirs if ancestral land is being sold.  

8. Registration and Stamp Duty  

Register the sale deed at the local sub-registrar office by paying the required stamp duty and registration fees.  

Stamp Duty Rates (Vary by State):  

• Maharashtra: ~6%  
• Karnataka: ~5%  
• Tamil Nadu: ~7%  
• Punjab: ~7%  
• West Bengal ~5%

9. Mutation of Land Records  

After registration, mutate the land in your name in the revenue records to establish ownership for future legal and tax purposes.  

Documents needed:  

• Sale Deed.  
• Tax Receipts.  
• Application Form.  

Documents Required to Buy Agricultural Land  

1. Title deed  
2. Encumbrance certificate  
3. Survey map  
4. Tax receipt (Khata or 7/12 extract in some states)  
5. NOC from relevant authorities  
6. Identity proof of the buyer and seller  
7. PAN Card for transactions over ₹50,000

Legal Tips to Avoid Land Scams 

• Always consult a real estate lawyer before signing any agreement.  
• Visit the land in person.  
• Never pay in full without checking all documents.  
• Use RTI (Right to Information) to get records from local authorities.  
• Avoid buying land from power of attorney holders without verifying the POA.  

Benefits of Buying Agricultural Land  

• Tax Benefits: Income from agricultural land is exempt from income tax.  
• Lower Investment Cost: Agricultural land is cheaper than residential or commercial land.  
• Passive Income: You can lease it to farmers or agri-businesses.  
• Long-term Appreciation: Land increases in value over time.  

Challenges to Consider  

• Restricted resale or conversion in many states.  
• Risk of land acquisition by the government.  
• Difficult to finance; banks do not easily lend for agricultural land purchases.  
• Legal title issues and local land mafia exist in some regions.  

Conclusion:

Buying agricultural land in India can be complex due to state-specific laws and legal formalities. Arbor Realty simplifies the process by offering end-to-end support—from verifying eligibility and conducting due diligence to securing required NOCs, registration, and mutation—ensuring every step is legally compliant.

With deep expertise in state land laws, access to vetted listings, and strong local networks, Arbor Realty helps farmers and investors make informed, secure decisions. Our transparent and streamlined approach ensures your agricultural land investment is both valuable and worry-free.