There is an old adage that there are some things that money can’t buy. Expounding the thought further, NRIs cannot purchase land in India. Not without the prior permission of the RBI, and they need to make an application with respect to the purchase of land to RBI, under the Foreign Exchange Management Act and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018.
A lot of NRIs dream of owning a farm house in a small town after retirement and returning to India. But in the event of their buying an agricultural land in India, the fact is financial investments or property rules are entirely different for NRIs. The rules abiding to transactions in agricultural land, farmhouse and plantation properties are different in comparison to those involving commercial and residential property.
Agricultural land purchase for NRIs
This begs the question, what is the legal transfer of agri lands or in other words? NRIs and OCIs are permitted to transfer the ownership of land—either agricultural land, farmhouse or a plantation property—by sale or by gift, but only to someone who is a permanent resident of the country. Now, if the NRI has bought such land with the permission from RBI, they need an approval from them to complete the sale transaction.
Likewise, an NRI cannot buy agri lands in the name of another individual unless that individual is a brother, sister, spouse or lineal ascendant or descendant. It will only be considered as a Benami transaction, which is punishable by law as it is illegal. Please seek the consultation of a good lawyer as our knowledge in this is somewhat limited.
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