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Buying an Agricultural Land-more Complex than you Think

Highlights

  • NRI cannot purchase agricultural land

  • In TN you can buy a maximum of 59.95 acres of land

Real Estate Law Wednesday, 4th January 2017   Editor: Twinkle

Investing in agricultural land is the safest and wisest decision to make because your investment would multiply manifolds with time. Indians consider investing in agricultural land very beneficial and majority of business class have their funds tied up in these lands. This is because agriculture is the primary revenue generating activity of India and would never see a permanent shut down or downfall. However, many precautions need to be taken before recklessly making the decision. You might think that you are aware of the rules but you never know what legal system is holding back from you.

An agricultural Land has its sub types. They are:

  1. Bagayeet (wet crops) land: they remain under cultivation throughout the year.
  2. Jirayeet (dry crops) land: depend on monsoon for cultivation
  3. Padik (barren) land: cultivation is not possible.

Different states have different land laws therefore it is very important to understand the rules of the state you want to invest in. This requires a lot of time investment before you can go ahead and make some monetary investment. Here are some points on issues you can face in various states relating to buying an agricultural land.

 

In Maharashtra, only an agriculturist can buy an agricultural land. If you want to buy an agricultural land to convert it into a land for non-agricultural use, you have to intimate the concerned authorities of such intentions within 90 days of acquiring such land. The land must be diverted to non-agricultural land within one year of acquisition, in accordance with Madhya Pradesh Land Revenue Code, 1959. The use of such non-agricultural land must start within 3 years from the date of such diversion.

In Karnataka, until now, the annual income limit for acquiring land by non-agriculturists was Rs. 2 lakhs which resulted in a lot of benami land ownership. However, now that the Karnataka land Reforms (amendment bill) 2015, has come into force, the annual income limit is increased to 25 lakhs. It also empowers deputy commissioners to double the area of land that can be acquired by non-agriculturists for industrial, housing, religious, housing and horticulture purposes.

 

In Tamil Nadu, you can buy a maximum of 59.95 acres of land. It can be converted to non-agricultural land at the orders of district collector, on the condition that no agricultural activity has been carried out there for the past 10 years from the date of such conversion.

 

In Gujarat, only an agriculturist belonging to the state could buy an agricultural land until 2012. Thereafter, any agriculturist throughout India can by the land.

 

In Haryana, certain areas have been declared as controlled areasand acquiring an agricultural land for non-agricultural purpose in these areas would require a certificate from the state government.

 

In Himachal Pradesh, non-state agriculturists require government permission to buy an agricultural land and it has a maximum land ceiling of 32 acres (160 bhigas).

 

In West Bengal, ownership of agricultural land is capped at 17.5 acres for irrigated areas, 24.5 acres for rain fed areas and one-eighth of an acre in urban areas. However, tea gardens, mills, workshops, livestock breeding firms, poultry farms, dairies and townships are exempted from such land capping.

 

In Uttar Pradesh, there is a 12.5 acres of land ceiling.

 

In addition to these there are many other restrictions on the purchase of agricultural land in India. Some of them are:

  1. Non-residents, persons of Indian origin and overseas citizens of India cannot purchase agricultural land, plantation properties or farm houses in India but, they can inherit them.
  2. Freedom-fighter’s or ex-serviceman’s land cannot be transferred without the prior permission of collector.
  3. If the owner of the land happens to be a minor, prior permission of a court is required for transfer of such land.
  4. A private limited company can buy an agricultural land subject to the provisions of articles and memorandum of association (MOU) of the company and a prior approval of registrar of the companies is also required.

 

Acquiring and agricultural property is not an easy task. Attention has to be given to each and every minor detail for a valid and legal purchase of land, else, you would be entangled in a lot of never ending legal proceedings in future.