How to Buy Agriculture Land in India & Who Can?

Introduction on how to buy agriculture land in India: As its name implies, it generally means land required for farming and agricultural purposes. It is important to know the conditions for buying such lands. Otherwise, it could lead the buyer into uninvited legal disputes that no one would want. Then, try to simplify the whole process by compiling every little piece of information that you need to simplify the whole thing. 

Agricultural land promises profitable long-term returns. However, if a decision is taken in a rush, such miscalculations can lead to significant losses. If a person doesn’t know the information about the legal procedure involved in buying agricultural land in India. It is important to learn about the legal procedures involved before buying agricultural land. Buying agricultural land in India can be a daunting task if you do not understand the legal guidelines. 

The 2nd largest agricultural land in the world is India. India’s agricultural land is about 157.35 million hectares, second only to the United States. About 60.3% of the land area is agricultural land in India. Land can be a very lucrative investment. India has abundant agricultural land and our economy is mainly based on agriculture. Buying agricultural land can be profitable, the process can be a bit difficult as the rules and regulations attached to it are unique. 

Guide on how to buy agriculture land in India, advantages of buying agricultural land in India, who can buy agricicultural land in India? and mistakes to avoid while buying agricultural land

How to Buy Agriculture land in India
Image Source: Pixabay

Is it worth buying agricultural land in India? 

Investment in agricultural land is capital-intensive. Investors have a clear financial plan in mind before investing in agricultural land. In addition, investors need to have realistic expectations of their investment, as the return on farming is not as attractive as it may seem. Agricultural land is a good investment in India. 

Who can’t buy agricultural land in India?

 If you are a Non-Resident Indian (NRI) or Person of Indian Origin (PIO), you cannot buy agricultural land, farmhouses, or plantation properties anywhere in India. 

Keep small things keep in mind when buying agricultural land

Make sure you are not buying disputed land – Other states in our country have different laws for buying agricultural land. Anyone is eligible to buy agricultural land in Telangana. But in Maharashtra and Karnataka only registered farmers are allowed to buy agricultural land. So, you know the principles of this state. Failure to comply with such rules results in a reversal. 

Land should be a marketable title – You are not buying a piece of agricultural land for residential purposes. It is forbidden to build a house or a place to live on farmland. Then, go through the conversion process if you want to use an agricultural property as a residence. 

Don’t forget to get a NOC letter to avoid any legal trouble in the future. The conversion process may be full of hassles. This helps you to check the land records you are buying and also to identify whether the seller is certified and trusted. It only minimizes the unwanted risks.

Advantages of buying agricultural land in India

Buying agricultural land has several advantages. But agricultural land laws vary from state to state. In some states, including Telangana, anyone can buy agricultural land, even if they are farmers, but in states like Karnataka, only registered farmers or those belonging to farming families can buy such land. Therefore, before buying a farm, one should know the relevant laws in the state. In addition, an individual has a limit of farmland, and it varies from state to state. Agricultural land has long-term returns in India. 

Investing in agricultural land saves you from spending all that money and gives you the option to use the land for several purposes within the limits of the law. Agricultural land guarantees some profit if it is in a particular place where the central or state government has announced some kind of infrastructure project. Since this is true of any development related to land, the asset you have purchased will never diminish over time.

Investing in good quality and fertile agricultural land in a good location not only prevents you from spending all the maintenance costs but also gives you the option to use this specific piece of agricultural land for many purposes in the future. 

Documents required to purchase agricultural land in India 

Here is a list of documents you need to purchase agricultural land. This may vary by state:

7/12 extract – 7/12 extract contains survey number, hissa number, size of agriculture land, full names of owners, crops grown on agriculture land, if there is any loan on land, etc. 

6/12 extract – 6/12 extract contains various mutation entries about different rights about agricultural land. Though, it shows the details of how the land was transferred and what other rights or conditions have been added or changed. 

8A extract – These showing details of land revenue tax paid on land, types of crops, names of owners, etc. 

Land Revenue Tax Receipt – The Tehsildar or the officer at Tehsil Office gives the receipt of the tax paid on the land tax. 

In case if you miss this: Organic Farming In Nagaland, How To Start?

Documents required to purchase agricultural land in India 
Image Source: Pixabay

Village Map – This map is needed to identify the location of land in the village. This is to calculate the actual location on the document. 

Soil Test Report – Soil testing is very important if the purpose of buying land is to grow crops. It specifies which crops are to be grown in the agricultural land. Soil testing can be done by the government and also private institutions. 

Original Title Deeds – These should be thoroughly scrutinized by a legal adviser to ensure that the land is clear of all litigation and that the title is clear. 

Encumbrance Certificate – Bank Loans, Private Party Mortgages, Government dues, or any such charges should be thoroughly checked before the sale deed.

Some other documents for buying agricultural land in India are;

Land measurement – A surveyor will measure the total ​​agricultural land area and carefully mark the boundaries in agricultural land. It is important to know if you are paying for the right plot area and the surveyor will check the measured size along with the size specified in the title certificate. 

Check title deed of agricultural land to confirm ownership – The title deed of the land confirms the name of the seller and checks whether the seller has the right to sell the property. Assume that there is more than one owner of existing agricultural land in the current title deed and the previous title deed. In this case, it is recommended that the documents be checked by a lawyer before registering to ensure that the owner has not given access to the land to others. 

Verify the necessary documents and sign the land sale agreement – After documents have been verified, sellers and buyers must prepare and sign a written document stating the advance payment amount, the balance to be paid, and the actual term of the sale. All should be supervised by a lawyer and signed by 2 witnesses and this is an important part of buying agricultural land. One should be careful and read the terms and conditions carefully before signing the agreement. 

Find out the stamp duty on the land – Stamp duty is another important aspect of purchasing real estate. Stamp duty is nothing, but property tax imposed by the government, and stamp duty imposed by the government on land vary from state to state. 

Documents required for land registration – Land registration is a document stating the transfer of property in the name of a new buyer and signed by both parties in the office of the Registrar. According to the India Registration Act, 1908, deeds must be registered in the office of the Sub-Registrar, and documents such as house tax receipts, previous deeds, and original deeds are required with two witnesses at the land registration time.

In case if you miss this: How To Buy Agricultural Land In Kerala

Mistakes to avoid while buying agricultural land
Image Source: Pixabay

Land sale/convention deed – This deed is a document that transfers ownership from the seller to the buyer. These documents contain all required details, such as location, measurement, and boundary details. 

Collect the encumbrance certificate – This assures the buyer that the agricultural land is free from any legal hassle or complaints. Anyone can obtain an incumbency certificate from the Sub-Registrar’s Office. 

Make sure there are no pending tax receipts and bills of land records – Before jumping into buying a property, the buyer must ensure that there are no outstanding land bills or notices. They should make sure that the water, electricity, or other bills are clean and up to date. 

Changing the title of agricultural land – After fulfilling all the legal procedures and important aspects of buying agricultural land, the name of the new owner of the land is added to the records of the village office. 

Mistakes to avoid while buying agricultural land

Check the title of the farmland, before buying it. This helps to avoid legal complications and also helps to get the land faster. Buyers should be aware of agricultural land laws. Buyers should make sure to physically verify the property and look at the details. As the buyer must know the quality of the soil and other such properties and this is important for agricultural land. 

Ignoring the importance of clear and undisputed land titles – Checking agricultural titles is basic compliance that must be done before purchase. Failure to verify clear and marketable land titles will lead to legal complications. It is important to make sure that there is no dispute over title and area, as this will only delay the acquisition of land. The title verification also includes a careful review of the mother’s dead documents. 

Failure to properly survey the land and inspect the site – the land is far beyond its history. Lack of physical verification of land can lead to miscalculations about the suitability of land for agriculture. Also, performs physical verification of the land with the help of surveyors and government officials to provide a clear explanation of the legal status of the land. It also helps in analyzing the boundaries and the nature of the lands. 

Not Knowing the Seller – One of the major purposes of extensive document verification is to determine the authenticity of the property. Tracing ownership should always begin with an examination of the initial documented record. For example, if agricultural plots are for sale in North Bangalore, knowing the history of landowners will tell you the history of land use itself. This is important because you do not want to buy seemingly fertile land just to find out if it is located in an environmentally sensitive area, or if it is in dispute. 

Agricultural land use in India

Land resources are more important for the livelihood of people dependent on agriculture;

  1. (Agriculture is a purely land-based activity as opposed to secondary and recurrent activities. In other words, the share of land in agricultural production is more than its share in production in other sectors. Thus, lack of access to land is related to the incidence of poverty in rural regions. 
  2. Land quality has a direct effect on agricultural productivity, which is not true of other activities. 
  3. In rural areas, in addition to its value as a productive factor, land ownership has a social value and it serves as protection against credit, natural hazards, or life emergencies, and social It also enhances status. 

Use of agricultural land includes net sown area, current fall, and land under tree crops. Agricultural land in India is just over 50% of the total geographical area of ​​the country. This is the largest area of ​​land in any country in the world. But due to the large population size in India, only 0.17 hectares of arable land is available per capita, which is less than the global average (0.24 hectare). In some selected countries, per capita agricultural land is much higher than in India. If a single piece of land is sown more than once a year, it is called crop intensity. This means the ratio between total harvested area and net sown area. The so-called Green Revolution is nothing more than a technical package, which includes HYV seeds, chemical fertilizers, and artificial irrigation.

In case if you miss this: Organic Farming In Assam, How To Start

Legal tips for buying agricultural land in India 
Image Source: Pixabay

Eligibility Criteria – Agricultural land purchase guidelines vary from state to state. The states of Gujarat, Rajasthan, Maharashtra, and Karnataka have some restrictions while anyone can buy agricultural land in Tamil Nadu. For example, sections 79A and 79B of the Karnataka Land Reforms Act, 1961, as amended in 2015, restrict the purchase of agricultural land only to farmers residing in the state or those with agricultural backgrounds. In addition, the buyer’s income from the non-agricultural profession should not exceed Rs. 2.5 million per annum. 

Non-Resident Indians (NRIs), PIOs, Overseas Citizens of India (OCIs), and foreign citizens also face restrictions on the purchase of agricultural land. According to the Foreign Exchange Management Regulations, 2015, NRIs, OCIs, and PIOs can acquire any immovable property in India except agricultural land/farmhouse/plantation lands. They can only inherit land from their ancestors. 

Land ceiling – Land ceiling is the maximum amount of agricultural land that a buyer can possess, and the rules vary considerably in all regions. In Maharashtra, for example, a maximum of 54 acres of agricultural land can be purchased. There is a limit of about 32 acres of land in Himachal Pradesh. Uttar Pradesh has limited the purchase of agricultural land to 12.5 acres, and in Tamil Nadu, it is 59.95 acres. It is important to know these land boundary rules to prevent fraudulent activities by the sellers and legal discrepancies. 

Overcoming legal barriers – If agricultural land is allotted by the government, special permission will be required for the transfer of property rights. Also, the landowner must have full possession of the property. For example, a landowner’s guardian or guardian who is a minor cannot sell the property because he does not have full rights to the property. Furthermore, leased agricultural land is not eligible for transfer. In case the lessee transfers the property deceitfully, not only will be penalized, but government officials may also seize the property.

Therefore, it is important to understand the legal guidelines for buying and selling agricultural land in a state. In addition, the buyer must be vigilant about the documents and in case of multiple owners, confirm the title deed, land agreement, encumbrance certificate, and release certificate. It is important to know the authenticity of the documents to avoid fraud. 

Restrictions and rules for buying agricultural land in India

Different states follow different procedures for purchasing agricultural land. In some states, only one farmer can buy such land while in other states there are no restrictions. Across India, NRIs and foreign nationals cannot buy agricultural land/plantation property/farmhouse. However, they can inherit agricultural land. Provides information by state in alphabetical order. Before you plan to buy agricultural land in India, you should know that the legal procedure varies from state to state. In some states, anyone is allowed to buy agricultural land, regardless of their occupation, while in other states, only agricultural land can be purchased. The details of the rules and restrictions of some of the important states are as follows;

In India, different states have different laws and regulations regarding the purchase of agricultural land. The purchase of agricultural land is governed by the Maharashtra Tenancy and Agricultural Land Act, 1948. The sale and purchase of agricultural land by a resident outside India are strictly prohibited under the Indian Foreign Exchange Control Regulations. Some states, such as Maharashtra, only allow farmers to acquire agricultural land, while other states, such as Goa, Bihar, and Tamil Nadu, allow both individuals and companies to acquire agricultural land for agricultural activities. Recently, Karnataka has amended its state law to allow anyone to own agricultural land.

In case if you miss this: Organic Farming In Punjab, How To Start

Restrictions and rules for buying agricultural land in India
Image Source: Pixabay

Tamil Nadu – There are no restrictions for buying agricultural land in Tamil Nadu. The agricultural land in Tamil Nadu, a maximum of 59.95 acres of agricultural land can be purchased. By the order of the District Collector, the land can be converted into non-agricultural land if no agricultural activity has taken place during the last ten years. 

Andhra Pradesh – Even in Andhra Pradesh, anyone is allowed to buy agricultural land irrespective of his profession. However, there is a limit to the agricultural land area. The family can purchase a maximum of about 10 acres of land in irrigated land, i.e., Class A, and 54 acres in Class K, including dry and non-irrigated lands. 

Kerala – Like Tamil Nadu, anyone can buy agricultural land in Kerala. According to the Kerala Land Reforms Act, 1963, is as given below;

  • If a person is an adult unmarried or a family consists of a sole surviving member, 5 standard acres subject to a maximum of 71/2 acres.  
  • For a family that has two or more family members but not more than five persons, up to 10 standard acres and up to a maximum of 15 acres land. 
  • In a family with more than ten members, the standard limit is 10 acres, plus 1 acre for each member over 5, and the maximum is 20 acres. 
  • The standard limit for any individual, except for joint family, is 10 acres, subject to a maximum of 15 acres. 

Gujarat – Agricultural lands cannot be bought by non-farmers. Only residents of the state can invest in agricultural land in Gujarat, but in 2012, the Gujarat High Court ruled that any farmer in the country was allowed to purchase such land in the state. 

Madhya Pradesh and Rajasthan – Madhya Pradesh and Rajasthan have no restrictions in these states. There were certain limits on buying agricultural land from ‘Khatedars’ in Rajasthan under section 17 of the threshold of implementation of the Agricultural Holdings Act, 1973. 

Maharashtra – This state allows only one farmer to purchase agricultural land with a maximum limit of 54 acres of land. 

Haryana – Some areas of Haryana have been declared as ‘Controlled Areas’. They will need to get a certificate from the Haryana government indicating a change in land use. 

Himachal Pradesh – Only farmers belonging to Himachal Pradesh are allowed to buy agricultural land. People from other states will need prior permission from the Government of Himachal Pradesh under the HP Tenancy and Land Reforms Act. And the maximum is 160 bighas or 32 acres. 

West Bengal – The private ownership of agricultural land in West Bengal is 17.5 acres for irrigated areas and 24.5 acres of land for areas where it rains according to the West Bengal Land Reforms Act. In urban areas, private ownership is limited to 7.5 cottages or one-eighth of an acre. Only poultry farms and dairies are exempt from the restrictions of the Land Reforms Act. 

Loans against agricultural land 

Farmers in India incur huge expenses while cultivating crops. Most of the time, they barely make a profit and struggle to pay off their debts. We have heard farmers in India lament the low cost of their products, the high cost of fertilizer, and the lack of water. To continue farming, they borrow from private lenders who charge very high-interest rates which make the situation worse. To help farmers in India by offering financial assistance when needed, many banks in India offer agricultural loans. 

What is a loan against agricultural land? A loan against agricultural land is defined as a piece of land is in the name of a farmer, it can be used as collateral to get a loan from a bank or financial institution. When a borrower mortgages agricultural land for money, it is called a “loan against agricultural land” and also called an “agricultural loan”.

In case if you miss this: Fast Growing Vegetables, Tips, Techniques

Loans against agricultural land 
Image Source: Pixabay

Features of loans on agricultural land 

These are specially designed for those who cultivate crops like farmers, cultivators, or gardeners. No businessman or professional can benefit from this. 

  • Generally, a farmer does not need to file an income tax return to apply for this agriculture loan. 
  • This requires a minimum of documentation. 
  • The loan period for agricultural land is up to 20 years. 
  • For this, there are no hidden charges on agricultural loans. 
  • Based on the farmer’s situation, the lender develops a flexible repayment plan. 
  • The borrower can use the agricultural funds. 
  • They can also use the funds to set up a greenhouse, cold storage, or horticulture center. 
  • Apply agricultural insurance to protect crops from damage. 
  • You can buy livestock or use it to cover marketing and operating expenses. 

Eligibility criteria for loan against agricultural land 

  • Dairy owners, farmers, horticulturists, and any gardener are eligible to apply for an agricultural loan. 
  • Make sure lenders prefer the applicant to be between 24 and 65 years of age. However, some banks provide loans to applicants under the age of 18 years. Eligibility varies from bank to bank. 
  • Co-applicant is required if the land is owned by two persons. 
  • Agricultural land is pledged as collateral. The eligibility to apply for a loan against agricultural land, the borrower has clear title deeds to the land. 
  • Lenders prefer lenders to maintain a residency of about 2 years. 
  • Banks offer agriculture loans based on the size of the mortgaged land. They mention at least an acre of land that a farmer should apply for a loan. 

Loans for buying agricultural land in India

Agriculture Land Purchase: Realizing the multiplicity of problems with the purchase of agricultural land, the government embarks on an array of solutions using agricultural loan schemes. One such loan scheme is banks that offer term loans for buying agricultural land. As a result, it improves the productivity of the agricultural sector and contributes to the economic growth of the country. In addition, most importantly, it helps small, individually small, tenant farmers to acquire land for agricultural purposes. In addition, it helps to use non-cultivated and wasteland for farming. As such, the bank offers loans ranging from Rs. 50,000 to Rs. 10 lakhs with long-term repayment options.

In some cases, farmers get loans for their land. That is, to use the land they have as collateral to secure a loan. Conflicts with the purchase of agricultural land, which is issuing loans to acquire agricultural land. Accordingly, mortgaging land for a loan is easily distinguished from loans for land acquisition. 

Objectives of a loan scheme for the purchase of agricultural land 

  • To assist different types of farmers in purchasing agricultural land 
  • To increase agricultural production
  • Use of fallow lands for farming 
  • Easy access to purchase of agricultural land 
  • Encouraging other agricultural sectors to diversify existing activities 

Eligibility – Individuals who have started farming and allied sectors are eligible for agriculture loans. The below-mentioned people are eligible for loans through the purchase of agricultural land;

  • Small and marginal farmers that mean owners of less than 5 acres of dry land or 2.5 acres of irrigated land even after purchasing land from the loan, 
  • Sharecroppers and tenant cultivators
  • Entrepreneurs with agricultural background 

Necessary documents for agriculture land purchase loan

  • Land documents (Certification from Revenue authorities) 
  • No due certificate from Cooperative Credit Society or Commodity Boards Financial Institutions 
  • Documents of title 
  • Supporting documents applied as proof to right over the land 
  • Sale agreement copy (vendor and applicant)
  • Simplified application only loans below 3 lakhs
  • Some additional documents specified by the respective bank 

The agriculture land purchase loan is offered by several banks;

  • Union Bank of India
  • Canara Bank
  • Bank of Baroda (Vijaya bank)
  • IDBI bank
  • Central Bank of India
  • State Bank of India and more


Please enter your comment!
Please enter your name here