Guide · Land and records

Who can buy agricultural land in India: FEMA and state laws

Why NRIs and OCIs cannot buy farmland, and how state land laws (Karnataka, Maharashtra, Himachal Pradesh) limit who else may buy it.

Checked on against the official sources at the bottom of the page.

In short

Two layers of law decide who may buy agricultural land in India. The first is central: under the RBI’s FEMA rules, a person resident outside India, whether an NRI or an OCI, may buy any immovable property other than agricultural land, plantation property or a farm house; inheritance stays open. The second is state law: land reform and tenancy Acts can bar or condition purchases by non-agriculturists, set ceilings, or require the Collector’s permission. The state rules differ a lot: Karnataka removed its bar on non-agriculturists in 2020, Maharashtra keeps one with exceptions in planned urban areas, and Himachal Pradesh bars transfers to non-agriculturists under section 118.

The rule

Central rule (FEMA, every state)

  • Purchase. An NRI or OCI may acquire immovable property in India “other than agricultural land/ plantation property/ farm house” (RBI Master Direction, para 3.1.1). The same exclusion applies to gifts received (para 3.1.2).
  • Inheritance. An NRI or OCI may inherit property from a person resident in India, or from a person resident outside India who acquired it under the law in force (paras 3.1.3 and 3.1.4). The RBI FAQ lists inheritance of “any immovable property”, so inherited farmland is not barred by FEMA.
  • Sale. Agricultural land held by an NRI or OCI can be sold or gifted only to a person resident in India (FAQ, question 1, citing rule 24(d) of the Non-debt Instruments Rules). Property other than agricultural land can also go to another NRI or OCI (para 3.2(2)).
  • Foreign nationals. A foreign national of non-Indian origin living abroad may take a lease of up to five years or inherit from a resident; “all other acquisitions/ transfers by foreign nationals will require the prior permission of RBI” (FAQ, question 4). See OCI and foreign nationals.

FEMA residence is not tax residence; see NRIs buying property in India.

State rules (residents too)

Agriculture and land are state subjects. Even a resident Indian may not be free to buy farmland. Payotte has read the Acts of three states; for the others, see “How to check” below.

State by state (Acts read)

StateRule in the Act as published on India CodeMain exceptions read
KarnatakaSections 79A and 79B, which barred persons with non-agricultural income above a limit (₹25 lakh in the 2015 text) and most non-agriculturists from acquiring land, were omitted by Act 56 of 2020 with effect from 1 March 1974. Section 80 is now titled “Restrictions on transfer of certain lands”: a transfer is not lawful in favour of a person who, for A-class irrigated land, does not use it for agriculture, or who would hold land above the ceiling of sections 63 or 64.Lands granted under section 77 are outside section 80. Section 80-A keeps the restrictions on lands granted to Scheduled Castes and Scheduled Tribes.
MaharashtraSection 63 of the Tenancy and Agricultural Lands Act: no sale, gift, exchange or lease of land is valid in favour of a person who is not an agriculturist (a person who cultivates land personally), or who would then hold more than two-thirds of the ceiling area, unless the Collector grants permission.Section 63(1C) (2016) lifts the bar inside municipal corporation and council limits, special planning or new town authority areas, and land zoned non-agricultural in a regional plan or town planning scheme; the land must be put to that use within five years, extendable by five years on a non-utilisation charge of 2% of market value a year. Section 63-IA allows sales for bona fide industrial use or integrated townships in some zones without permission.
Himachal PradeshSection 118: no transfer of land “by way of sale, gift, will, exchange, lease, mortgage with possession, creation of a tenancy or in any other manner” is valid in favour of a person who is not an agriculturist (a landowner who cultivates land personally in the state). A benami purchase or a power of attorney putting a non-agriculturist in possession counts as a transfer.Inheritance and gifts or wills to legal heirs; landless labourers, village artisans and others listed; purchases from the state housing authority or a development authority; and State Government permission for prescribed purposes, with the land to be used within two years (extendable by one year) or it vests in the State.

These are summaries of long sections. The Karnataka and Maharashtra texts on India Code carry amendments to 2025; the Himachal Pradesh text shows amendments only up to 2012, so a later change may not appear in it.

How to check in your state

  1. Read the state’s land reform or tenancy Act on India Code (indiacode.gov.in, State Acts) and look for a section titled “transfer to non-agriculturists” or “restrictions on transfer”, plus the ceiling chapter.
  2. Ask the Tahsildar or the Collector’s office whether the seller’s land is under any grant condition, tenancy or ceiling case. Granted land, tenanted land and land under a ceiling order are often not freely saleable.
  3. Check the record of rights for the survey number (see mutation of property records) and run a title search.
  4. If you plan to build, read conversion of agricultural land to non-agricultural use and buying land and plots.

Frequently asked questions

Can an NRI or OCI buy agricultural land in India?

No. The RBI Master Direction (para 3.1.1) excludes agricultural land, plantation property and farm houses from what an NRI or OCI may buy. This is a central rule and applies in every state.

Can an NRI inherit agricultural land?

FEMA allows it: the RBI FAQ lists inheritance of any immovable property. State law can still apply; in Himachal Pradesh, for example, inheritance is expressly outside the section 118 bar. If the NRI later sells, the buyer must be a person resident in India.

Can a non-farmer buy farmland in Karnataka?

Since the 2020 amendment, Karnataka’s Act no longer bars non-agriculturists as such. Limits remain: the land-holding ceiling, the rule on A-class irrigated land, and the restrictions on granted land.

Can a non-agriculturist buy farmland in Maharashtra?

Only with the Collector’s permission under section 63, unless the land falls in an area listed in section 63(1C), such as municipal limits or a non-agricultural zone of a regional plan, or in a case covered by section 63-IA.

Does a power of attorney get around these rules?

No. Himachal Pradesh’s section 118 treats a power of attorney that puts a non-agriculturist in possession as a transfer. See also power of attorney sales and the law.

Sources and limits

Only the Acts listed in the sources were read; Payotte has not compiled the rules of the other states, and land ceilings in units or acres are not summarised here. Not read: the rules prescribing the permission procedures and fees in each state. A property lawyer can confirm the rule that applies to a given survey number. This guide is general information, not legal advice.

General information drawn from the official sources cited and dated on this page. It is not legal, tax or financial advice: for your own situation, ask a licensed professional.

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Sources

All guides · Payotte India