Key takeaway
NRIs and OCIs cannot buy agricultural land, plantation property or farmhouses in India. They can inherit them. If they sell such land, the buyer must generally be an Indian citizen resident in India. State land laws may add further restrictions.
The basic FEMA rules
Property holdings of non-residents are governed by the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. In outline:
- Purchase — NRIs and OCIs may buy residential and commercial property, but not agricultural land, plantations or farmhouses.
- Inheritance — NRIs and OCIs may inherit any immovable property, including agricultural land, from a person who held it lawfully.
- Gift — NRIs and OCIs may receive residential or commercial property as a gift from a relative, but not agricultural land, plantations or farmhouses.
- Sale — agricultural land, plantations and farmhouses held by an NRI or OCI can generally be sold only to an Indian citizen resident in India.
State land laws
Several states restrict who may buy agricultural land, for example by limiting purchases to agriculturists or capping holdings. These rules apply in addition to FEMA. Check the law of the state where the land is.
If you have inherited farmland
- Obtain proof of inheritance — will and probate, succession documents or a legal heir certificate.
- Get the land records (record of rights, patta, khatauni or 7/12 extract) mutated in your name.
- Keep the land protected — boundaries, tax payments and regular inspection.
- If you sell, sell only to an eligible buyer and pay capital gains tax.
- Repatriate the proceeds within the annual limit, with tax-compliance forms.
Converted land
Land officially converted to non-agricultural use by the competent authority is generally treated as non-agricultural. Check the conversion order and current land records before any transaction.
Common mistakes
- Buying farmland in a relative’s name to get around the rules.
- Accepting farmland as a gift.
- Selling inherited farmland to a non-resident buyer.
- Leaving revenue records in a deceased parent’s name.
Frequently asked questions
Can an OCI inherit agricultural land?
Yes, inheritance is permitted.
Can I buy a farmhouse as an NRI?
No, farmhouses are excluded from what NRIs and OCIs can buy.
Can I repatriate the sale proceeds of inherited land?
Yes, within the annual limit for NRO balances and subject to tax compliance.
Does returning to India change things?
Once you become resident under FEMA, the restrictions for non-residents no longer apply, but state laws still do.
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References
- Foreign Exchange Management Act, 1999
- Foreign Exchange Management (Non-Debt Instruments) Rules, 2019
- State land reform and revenue laws
Last reviewed: November 2026.
The information provided is for general educational purposes only and does not constitute legal advice. Applicable laws and procedures may vary depending on the facts, jurisdiction, and circumstances of each matter. Consult a qualified legal professional before taking action.
