This is one of the most frequently asked -- and most frequently misunderstood -- questions from the Indian diaspora looking at land back home. The short answer disappoints a lot of people, so it's worth understanding exactly where the line is.
The short answer
No. Under Rule 24 of the FEM (Non-Debt Instruments) Rules, 2019, NRIs and OCI cardholders cannot buy agricultural land, plantation property or a farmhouse in India, and cannot receive one as a gift. Inheritance is the only route that reaches it. Residential and commercial property remain open to them.
This is a specific carve-out under the Foreign Exchange Management Act (FEMA): NRIs can freely buy most other categories of Indian real estate -- residential and commercial property -- but agricultural land is one of the few categories reserved for resident Indians.
What FEMA restricts
The restriction covers direct purchase of raw agricultural land, plantation land (tea, coffee, rubber, and similar), and farmhouses. It applies regardless of how long the person has held NRI status or how strong their ties to India remain. The restriction exists to keep agricultural land within the resident farming and land-holding population rather than becoming an investment asset class for the diaspora.
The operative provision is Rule 24 of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, which sets out the three routes by which an NRI or OCI cardholder may acquire immovable property in India, and how each one treats agricultural land:
| Route | Agricultural land, farmhouse, plantation |
|---|---|
| Purchase | Excluded. Everything else is permitted, funded through banking channels or non-resident accounts. |
| Gift from a person resident in India, or an NRI or OCI who is a relative as defined in section 2(77) of the Companies Act, 2013 | Excluded. The same carve-out as purchase. |
| Inheritance from a person resident in India, or from a person resident outside India who acquired it lawfully under the law in force at the time | Permitted. Any immovable property, agricultural land included. |
Inheritance is therefore the only route that reaches agricultural land. A gift does not, even from a parent or grandparent -- a point that surprises many people, because gift and inheritance are otherwise treated alike for the property categories NRIs can acquire.
What NRIs can do instead
- Inherit agricultural land from a person resident in India -- this is explicitly permitted and doesn't require Reserve Bank of India approval.
- Retain agricultural land they owned before becoming an NRI (i.e., land purchased while a resident Indian, prior to acquiring NRI status), subject to standard reporting.
- Seek specific RBI approval for agricultural land purchase in narrow, case-by-case circumstances -- this is the exception, not a reliable path, and requires a formal application.
OCI cardholders vs NRIs
Overseas Citizens of India (OCI) cardholders are generally subject to the same restriction as NRIs on agricultural land, plantation property, and farmhouses -- OCI status does not unlock agricultural land purchase rights. Foreign nationals of Indian origin sometimes assume OCI status changes this; it doesn't, under current FEMA rules.
If you already inherited agricultural land
Inherited agricultural land can be retained. If you sell it, the buyer must be a person resident in India who is an Indian citizen -- a sale to another NRI, an OCI cardholder or a foreign national is not permitted, and neither is a gift to one. Structuring the transaction as a disguised purchase by a non-resident creates the same problem. If you've inherited agricultural land as an NRI and are considering what to do with it, get FEMA-specific legal advice before any transaction, not just general property advice.
Buying from an NRI who inherited the land
A resident Indian citizen buying from an NRI or OCI seller is the lawful exit route for inherited farmland, and the tax step falls on the buyer, not the seller. Any payment to a non-resident that is chargeable to tax in India requires the payer to deduct tax at source. From 1 April 2026 that is section 393(2) of the Income-tax Act, 2025, which replaced section 195 of the 1961 Act with the same mechanics:
- Get a TAN before you pay. A PAN is not enough. Buyers who have only ever bought from residents usually do not have one.
- Ask the seller for a lower or nil deduction certificate. The seller applies to the Assessing Officer under section 395 on Form 128 (formerly section 197 and Form 13). Without one, buyers generally deduct on the full sale price, because they cannot verify the seller's cost.
- Deduct, deposit and file. Deposit the tax, file the quarterly TDS return on Form 144 (formerly Form 27Q), and issue the seller the TDS certificate.
Rural agricultural land is not a capital asset, so its sale may produce no taxable gain at all -- see the rural land test. Establishing that is the seller's case to make, normally through a nil deduction certificate. Do not skip deduction on the seller's word: a shortfall becomes the buyer's liability.
What happens if the rules are broken
A FEMA contravention is dealt with by adjudication, and it is expensive. Under section 13 of FEMA the penalty is up to three times the sum involved where that can be quantified, or up to ₹2 lakh where it cannot, plus up to ₹5,000 for every day a continuing contravention goes on. The adjudicating authority can also order the property in question confiscated.
Contraventions can be compounded -- settled on application to the Reserve Bank of India -- which is the usual route for an honest mistake, such as agricultural land accepted as a gift before anyone checked the rule. Take advice before applying; the application is itself an admission.
Go deeper
- OCI cardholders and inherited farmland — what you can keep, who you can sell to, and how repatriation actually works
- Capital gains on agricultural land and Section 54B — the rural land test that decides whether any tax arises at all
- Power of attorney in land deals — essential if you will not be in India to sign
- Sections 79A and 79B in Karnataka — why a state relaxation does not change the FEMA position
- Agricultural vs commercial land and the NA conversion process — residential and commercial property is open to NRIs, and conversion is what separates the categories
- Understanding land titles and documentation — the verification sequence for any Indian property purchase
- Managed farmland — these schemes are marketed heavily to the diaspora, which makes eligibility a live issue
NRIs and OCI holders can buy residential and commercial property freely. Browse residential plots near Kochi, commercial land around Hyderabad, or plotted developments near Bangalore.
This article is general information, not legal advice. FEMA rules and their interpretation change over time and RBI approvals are handled case-by-case -- consult a lawyer experienced in FEMA and NRI property matters before making any decision about agricultural land in India.
Written by
Agriva Editorial
The Agriva Editorial team writes practical, field-tested guides for buyers, sellers, and brokers navigating India's farmland and niche real estate market.