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Basics of Agricultural Land Ownership

FAQ

Cannon-residents acquire agricultural land in India?

No, non-residents (NRIs/PIOs) cannot directly acquire agricultural land in India. According to the Foreign Exchange Management Act (FEMA) and the Reserve Bank of India (RBI) guidelines, non-residents are prohibited from purchasing agricultural land.

Arethere any exceptions to the restriction on purchasing agricultural land bynon-residents?

Yes, the following exceptions exist:
Non-residents can inherit agricultural land from a relative residing in India. Non-residents can acquire agricultural land through a trust, provided the trust is for agricultural or charitable purposes, but this is subject to specific legal provisions.

Ownershipand Holding of Agricultural Land by Non-Residents

FAQ

Can non-residents hold agricultural land in India if inherited?

Yes, non-residents can hold agricultural land in India if it is inherited from a resident relative. The property will be governed by the Indian Succession Act, and the non-resident heir will need to comply with FEMA regulations.

Can a non-resident hold agricultural land for commercial purposes?

No,agricultural land cannot be held for commercial or business purposes bynon-residents. It must be held only for agricultural use. Any change in the useof land requires government approval.

What happens if a non-resident inherits agricultural land?

Ifa non-resident inherits agricultural land, they can legally hold the land, butthey must ensure compliance with FEMA regulations. They will need to report theacquisition to the RBI and fulfill other reporting requirements.

Ownershipand Holding of Agricultural Land by Non-Residents

FAQ

Can non-residents hold agricultural land in India if inherited?

Can a non-resident hold agricultural land for commercial purposes?

No,agricultural land cannot be held for commercial or business purposes bynon-residents. It must be held only for agricultural use. Any change in the useof land requires government approval.

What happens if a non-resident inherits agricultural land?

Transfer of Agricultural Land by Non-Residents

FAQ

Can non-residents transfer agricultural land in India?

Non-residents are allowed to transfer agricultural land only under specific circumstances:
Sale: Non-residents cannot sell agricultural land directly, except under certain conditions like selling to a resident or transferring the land to a legal heir who is a resident.
Inheritance: Agricultural land can be transferred to a legal heir who is a resident of India.

What are the tax implications on the transfer of agricultural land by a non-resident?

Capital Gains Tax: If agricultural land is transferred by a non-resident, capital gains tax will be applicable, depending on whether the land is held long-term or short-term.
Short-Term Capital Gains: If the land is sold within 2 years of acquisition, it will be subject to short-term capital gains tax at 30% (plus applicable cess).
Long-Term Capital Gains: If the land is held for more than 2 years,long-term capital gains tax of 20% (with indexation benefits) applies

Are there any exemptions available on capital gains for the sale of agricultural land by non-residents?

No,there are no specific exemptions under the Income Tax Act for agricultural landheld by non-residents. However, the long-term capital gains tax can be reducedby utilizing the indexation benefit.

Reporting and Compliance for Non-Residents

FAQ

What are the reporting requirements for non-residents acquiring agricultural land in India?

Non-residentsacquiring agricultural land through inheritance must report the acquisition tothe Reserve Bank of India (RBI) and comply with FEMA regulations.No other acquisition method is permitted for non-residents under normalcircumstances.

Are non-residents required to file any tax returns for agricultural land transactions?

Yes,non-residents must file an Income Tax Return (ITR) in India if they earnany income (like rental income from agricultural land) or incur capital gainson the sale of agricultural land. Tax Deducted at Source (TDS) willapply to any income or capital gains generated from such transactions

Do non-residents need to pay any stamp duty for the transfer of agricultural land?

Yes,stamp duty will be applicable for the transfer of agricultural land,whether by inheritance or sale. The rate varies depending on the state in whichthe land is located.

Additional Considerations

FAQ

Cannon-residents use the proceeds from the sale of agricultural land for repatriation?

The proceeds from the sale of agricultural land can only be repatriated if the non-resident meets the FEMA guidelines and the repatriation is made through an NRO (Non-Resident Ordinary) account. However, agricultural land sale proceeds are typically restricted from being repatriated abroad.

Cannon-residents invest in agricultural land through a company or partnership?

No,non-residents cannot invest in agricultural land through a company,partnership, or any other form of business entity unless it is strictly incompliance with the specific agricultural investment rules laid down by Indianlaw. Any such investment would be subject to RBI and FEMA regulations.

Arethere any restrictions on the size of agricultural land that can be held bynon-residents?

Yes,there are restrictions on the size of agricultural land that can be held bynon-residents. For example, some states in India impose caps on the amount ofagricultural land that can be held by a single entity or individual, includingnon-residents.

Basics of Agricultural Land Ownership

FAQ

Ownershipand Holding of Agricultural Land by Non-Residents

FAQ

Ownershipand Holding of Agricultural Land by Non-Residents

FAQ

Transfer of Agricultural Land by Non-Residents

FAQ

Reporting and Compliance for Non-Residents

FAQ

Additional Considerations

FAQ

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