Agriculture /Plantation/Farmhouse Property Purchase/Sale In India – By NRIs, OCIs, Other Foreign Citizens – Rules and Restrictions Under Foreign Exchange Laws – RBI Services Wrt Representation / Clarifications / Compounding – Delhi NCR, Mumbai, Kolkata, Hyderabad, Bangalore, Chennai, Chandigarh, Major Cities India.


Can Non Residents (NRIs, OCIs, PIOs, Other Foreign Citizens) Buy or Sell Agricultrue Property In India?

Lot of Non-residents (NRIs, Foreign Citizens) wish to buy an agriculture land, plantation propery or farm house in India. However, this is important to understand that as per Foreign Exchange Management Act 1999 (FEMA) there are restrictions on acquiring a property in India which is of the nature of Agriculture, Plantation or Farm House. Here, in this article Non-residents can understand various provisions under the FEMA to acquire, hold, sale or transfer of agriculture property in India.

Which FEMA Provision (RBI Regulation/Rule) Regulate The  Agriculture Property Purchase in India By Non Resident (NRIs, Foreign Residents/Citizens)?

Earlier (till October 17, 2019), agriculture property acquisition and transfer in India (by Non-residents) was regulated under the provisions of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018. Now, this regulation is no more into effect. Wef Oct 17, 2019, immovable property (including agriculture property) acquisition as well transfer in India by Non-residents are governed by Foreign Exchange Management (Non-Debt) Instrument Rules, 2019.

What Are The Agriculture Type Properties Restricted Under FEMA?

Foreign Exchange Management (Non-Debt) Instrument Rules, 2019, provide restrictions in relation to following kind of agriculture properties:

  • Agricultural Land
  • Farm House
  • Plantation property

Whether Migrating NRIs Can Hold Agriculture Property In India?

Yes. Indians, leaving abroad for employment or otherwise, can hold the Agriculture property in India if that property was acquired by them when they were Resident in India. They can also sell or transfer this property to a person who is resident in India.

What If Non-Resident Acquire An Agriculture Property By Way of Inheritance?

Non-residents, who are NRIs or OCI Card holders, can acquire an Agriculture property in India by way of inheritance. This inheritance can be done from a person who is resident in India. However, the inheritance is also allowed from a Non-resident subject to the condition that Non-resident had acquired such Agriculture Property in accordance with the prevailing provisions of Foreign Exchange Laws.

Can Non-resident Transfer The Agriculture Property?

A non-resident, who is NRI or OCI card holder, can transfer an Agriculture property in India. However, the NRI or OCI need to ensure that transfer is made to a person who is resident of India. Agriculture property cannot be transferred to a non-resident without prior permission of Reserve Bank of India (RBI).

Whether Gift Is Permissible For NRIs In Relation To Agriculture Property?

NRIs, OCIs, Other Non-residents are not allowed take gift of an Agriculture/Plantation/Farmhouse property, which is situated in India. However, NRIs/OCIs can gift an agriculture property to a person resident in India (if the property was acquired by them as per applicable provisions of foreign exchange laws).

What Are The Restrictions/Relaxations For Foreign Citizens Of India Origin Vs NRIs?

In relation to agriculture property in India, Foreign Citizens who are OCI card holders are treated at par with NRIs e.g. inheritance or transfer of agriculture property. However, Foreign citizens, who does not hold OCI card, are not allowed to enjoy such privilege, and they will have to seek RBI clarification or approval before doing a transaction in relation to agriculture property.

Whether There Are Specific Blanket Restrictions In Relation To Any Specific Country?

Yes. Restriction is there for a person who is Citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Hong Kong or Macau or Democratic People’s Republic of Korea (DPRK). Citizen of any of these country is not allowed to either acquire or transfer by any sort of mean any property in India (including Agriculture property) without the prior permission of RBI.

Whether Foreign Citizens Resident In India Can Acquire Agriculture Property?

Foreign Citizens, who are settled and resident in India, and who are not citizens of specific countries (i.e. Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Hong Kong or Macau or DPRK), can acquire an Agriculture / Plantation/ Farm house Property in India. FEMA as such does not apply on them as they are Resident in India. However, it is advisable to seek proper advise or RBI clarification before doing such transaction.

What Is Remedy If Non-Resident Acquire An Agriculture Property In India Without The Compliance of Foreign Exchange Laws?

If an Agriculture property is acquired by a non-resident or any other person in contravention of the Foreign Exchange Laws, then a Compounding Request Application can be filed with RBI for compounding of contravention. In this regard, as soon as an NRI, OCI, PIO or any other person identifies FEMA violation in relation to Agriculture Property etc, he/she without any further delay should approach the RBI for compounding of same.

What Are Steps Non-Residents Should Take In Relation To Agriculture Property In India?

Non-residents (NRIs, OCIs, PIOs, Others) and Resident Foreign Citizens should take following steps in relation to Agriculture/Plantation/Farmhouse Property in India:

  • Seek proper advice and guidance from a Foreign Exchange Laws Consultant.
  • Approach RBI for seeking clarifications wherever there is a doubt about any acquisition, holding, sale or transfer.
  • File an application for compounding with RBI if any contravention is done in relation to agriculture property acquisition or transfer in India.

What Are The Other Provisions In Relation To Agriculture Property Purchase or Sale In India?

Non-residents (NRIs, OCIs, PIOs, Others) should take care of local state laws as well applicable Income Tax Provisions in relation to acquisition, transfer, as well regular income in relation Agriculture Property in India.

Services By S Lohia & Associates – NRIs, OCIs, Other Non-Residents/Foreign Citizens – Agriculture/Plantation/Farm House Property Transactions

  • Foreign Exchange Laws Consultancy To NRIs, Non Residents
  • Opinions On FEMA Provisions, RBI Regulations
  • Assisting In Preparing & Filing Applications With RBI For Seeking Clarifications
  • Preparing and Filing Compounding Application
  • Liaison, Representation Before RBI For Compounding and Other Matters
  • NRI, OCI Tax Consultancy
  • Power of Attorney Services To Execute On Behalf of NRIs For Doing Transactions In India

Other NRI Related Services/Topics By S Lohia & Associates NRI Team