Legal and Financial Aspects of Buying Agricultural Land in India
July 01, 2025

Investing in agricultural land is an attractive option for many individuals in India, offering the potential for high returns. However, it is essential to understand the legal and financial aspects involved before purchasing. In this article, we will guide you through the process of agricultural land purchase in India, highlighting essential considerations and providing valuable tips to help you make informed decisions.
Eligibility Criteria for Buying Agricultural Land in India
The eligibility criteria for agricultural land purchase vary from one state to another. While anyone can buy agricultural land in Tamil Nadu, states like Gujarat, Maharashtra, and Karnataka have certain restrictions. For instance, the Karnataka Land Reforms Act 1961, amended in 2015, restricts the purchase of agricultural land to state-based agriculturists or those with an agricultural background. Additionally, the buyer's income from non-agricultural occupations should not exceed ₹25 lakh annually.
Documents Required for Buying Agricultural Land
When buying agricultural land in India, several essential documents need to be verified and obtained:
- Title Deed: This document verifies the seller's authenticity and confirms their right to sell the property.
- Sale Agreement: The sale agreement details all aspects of the transaction and should be reviewed by a lawyer.
- Stamp Duty: The stamp duty is determined by the state where the land is located and should be paid as per the directive.
- Registration: This document contains the terms and conditions of property transfer to the buyer's name and requires registration at the local sub-registrar's office.
- Tax Receipts and Bills: Ensuring no outstanding dues on the property is crucial, and tax receipts and bills should be obtained.
- Encumbrance Certificate: This certificate confirms that the property is free from legal or monetary disputes.
- Land Measurement Certificate: A certificate stating that the land measurements are as per the data mentioned in the title deed should be obtained.
- Power of Attorney: If acting on behalf of the seller, a power of attorney document may be required.
Legal Tips for Buying Agricultural Land
If you are planning to agricultural land purchase in India, here are some legal tips to keep in mind:
Check the Title Deed
A title deed is essential to verify ownership of the agricultural land purchase. Ensure that the current and previous title deeds do not have multiple owners, as this could lead to complications. Consult a lawyer to review all relevant documents before proceeding with registration.
Sign a Land Sale Agreement
Signing a written land sale agreement is crucial to protect both parties involved in the transaction. This agreement should mention details such as the amount of advance payment, balance payment, and the sale period. Review each clause carefully before signing to avoid any future disputes.
Determine Stamp Duty
Stamp duty is an essential aspect of buying agricultural land. It is a tax the government imposes on the property and varies from state to state. Understanding the stamp duty applicable in your region is essential for budgeting and legal purposes.
Complete the Registration Process
The registration process involves transferring the property's ownership to the buyer's name. The deed must be registered at the local sub-registrar's office, and documents such as house tax receipts, previous deeds, and the original deed must be presented. Two witnesses should be present during the registration process.
Obtain Sale/Conveyance Deed
The sale or conveyance deed is a crucial document that transfers property ownership from the seller to the buyer. It contains vital details such as the agricultural land's location, measurement, and boundary information.
Collect Encumbrance and Land Measurement Certificates
Before finalising the purchase, obtaining an encumbrance certificate from the sub-registrar's office is essential. This certificate ensures no legal complications or disputes are associated with the agricultural land. A land measurement certificate should also be obtained to verify that the measurements match those mentioned in the title deed.
Verify Tax Receipts and Bills
Before purchasing agricultural land, it is essential to ensure no pending tax receipts or bills related to the property. Ensure all bills, including water, electricity, and other utilities, are current and precise.
Change the Title of the Land
Once all legal procedures are completed and necessary steps have been taken, it is essential to change the title of the agricultural land in the village office records. This ensures that the new owner is officially recognised.
Rules and Restrictions for Agricultural Land Purchase
The rules and restrictions for purchasing agricultural land in India vary from state to state. While some states allow anyone to buy agricultural land, regardless of their profession, others restrict purchases to agriculturists. Non-resident Indians (NRIs) and Persons of Indian Origin (PIOs) are generally not allowed to purchase agricultural lands, farmhouses, or plantation properties in India. However, they have the right to inherit such properties.
Final Thoughts
Buying agricultural land in India requires careful legal and financial consideration. It is essential to understand the eligibility criteria, gather all necessary documents, and follow the legal process outlined by each state. By taking these steps, you can ensure a smooth and hassle-free purchase of agricultural land.
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FAQs
1. Can NRIs or PIOs buy agricultural land in India?
No, NRIs and PIOs are generally not allowed to buy agricultural land in India.
2. Are there any income restrictions for purchasing agricultural land?
Some states have income restrictions for non-agricultural professionals interested in buying agricultural land. For example, in Karnataka, the buyer's income from non-agricultural occupations should not exceed ₹25 lakh annually.
3. What documents are required to buy agricultural land?
Documents such as the title deed, sale agreement, stamp duty payment receipt, registration papers, tax receipts and bills, encumbrance certificate, land measurement certificate, and power of attorney may be required when purchasing agricultural land.
4. Can I purchase agricultural land in any state of India?
The rules and regulations regarding the purchase of agricultural land differ from state to state. While some states allow anyone to buy agricultural land, others have certain restrictions and eligibility criteria.
5. How can I verify the ownership of agricultural land?
The ownership of agricultural land can be verified by checking the title deed, which confirms the seller's name and right to sell the property. Consulting a lawyer is recommended to ensure there are no complications.
6. What is an encumbrance certificate?
An encumbrance certificate is a document that certifies that a property is free from any legal or monetary disputes. It ensures no pending mortgages, loans, or claims on the property.
7. How much stamp duty do I need to pay for buying agricultural land?
The stamp duty for buying agricultural land varies from state to state. It is essential to check the stamp duty rates applicable in your region before purchasing.
8. Can I change the terms of the sale agreement after signing it?
It is generally not advisable to change the terms of the sale agreement after signing it. Review the agreement carefully and consult a lawyer before signing it to avoid future disputes.
9. Can I finance the purchase of agricultural land with a loan?
Yes, several financial institutions offer land loans designed explicitly for purchasing agricultural land. These loans provide funding for buying the land and can be repaid over a specified period with interest.
10. What are the repayment options for land loans?
Land loans typically offer flexible repayment options, including monthly, quarterly, or annual instalments. The tenure of the loan depends on various factors, such as the amount borrowed and the financial institution providing the loan.
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