Buying agricultural land in India is undoubtedly the most sensible decision that you would ever make. After all, agricultural lands are much cheaper than lands in cities and urban developments, income from farm land is tax free, and you can expect good returns on investment when you sell it, especially if the land is located in an area where the government plans to bring up an infrastructural project in the near future.
Most state governments require you to be a farmer to buy agricultural land in India. Also, you must study the state by-laws carefully before investing in farm land to avoid any legal litigation later on. This article highlights various legal formalities that you must consider before making a purchase decision.
But, buying agricultural land in India is not as convenient as buying real estate in Mumbai, Pune, Bangalore, Ahmedabad, Delhi, or any other city for that matter. That's because to buy agricultural land in India:
- Almost all state governments, with exception to Telangana, Kerala, and Tamil Nadu, require you (or your father or grandfather) to be a farmer.
- If you or your forefathers are not farmers, you need to show that you already own some agricultural land
- Under no circumstances can you convert fertile farm land into a residential development. You can use only dry agricultural land for that purpose.
However, if you are able to override these limitations, buying farm land in India can be very a fruitful and promising decision.
Below are some of the points that you must consider while purchasing agricultural land in India:
Verify the owner carefully
Before finalizing the deal, you must carefully confirm if the person selling the land is the actual owner. The title deed of the property, Pattadar Pass Book, and 1B register confirm the owner's name and also verify if he has absolute rights to sell the property. Also, get all the previous deeds examined by a lawyer to ensure that there are no land disputes or more than one owner of the land.
Check land classification
Many categories of land fall under prohibited purchase categories. Know land laws across India carefully. Also, check if the land that you wish to buy is clear of all such prohibitions. Under no circumstances you should consider investing into a land that is a Government property, forest land, or has been assigned to landless poor by the Government.
Agreement or sales deed
After verifying all the documents, get a detailed sales deed written with complete details of land, its boundaries, and name and address of the owner. Your agreement must be made by a lawyer, signed by both the parties, and duly signed by two witnesses too.
Stamp duty and Registration of the land
Stamp duties are government taxes that vary from state to state. Stamp duty on you land must be paid as it is a legal document and can be used in court as evidence. You must also get your land registered in the name of the owner within four months of date of purchase. You need to enclose the original sales deed, previous deed, if any, tax receipt as documents, and two witnesses must be present at the time of registration.
Mutation
Within 90 days from the date of registration, an application must be send to the Tehsildar in form 6A for making mutations in the land records. You must also seek Pattadar Pass Book and Title Deed from him.
Survey of land
Get the land surveyed by a recognized surveyor to ensure the measurements of the plot and its boundaries are as mentioned in the title certificate.
Entry in Pahani/Adangal
You must also get your land details entered in the Pahani/Adangal
Obtain tax receipts and copies of land records
Obtain all the latest land tax receipts and certified copies of Pahani/Adangal and 1B register for legal proof of purchase.
Purchasing land from NRI owners
You can buy farm land from NRI owners also. However, he must first authorize a third party to sell the land on his behalf. If you wish to purchase agricultural land from NRI owners, carefully check his power of attorney, duly signed by the Indian embassy within his province.
Getting agricultural land converted into non-agricultural land
For this, you need to submit an application to the concerned authorities, stating the reason for conversion. You must enclose all necessary documents, including sales deed, tax receipts, mutation letter as well as details stating the dimensions of the land. You must pay the fee applicable for land conversion and ensure that no litigation is pending.
Above all, whenever you plan to buy land in India, agricultural or non-agricultural, you must always seek help from India's best real estate consultants who are fully aware of rules and regulations pertaining to real estate sale and purchase and can help you make a wise choice.
