nri purchase of Agri Land in punjab

[satbir singhwahi]

Mr A is resident of Canada has inherited agriculture land in Punjab and residential house. In Fy 2026-27 he stays more than 182 days in India and has no business or employment in Canada. Only pension he gets from Canada Govt. Whether he can purchase agri land in FY 2027-28, if intends to stay in India and do Agri work.

[YAGAY and SUN]

Opinion under Income-tax Act, 1961 and FEMA

Mr. A, a citizen/resident of Canada, has inherited agricultural land and a residential house in Punjab. During FY 2026-27, if he stays in India for more than 182 days and has no business or employment abroad (other than receiving a Canadian government pension), his residential status under the Income-tax Act, 1961 may become Resident in India for FY 2026-27, subject to satisfaction of the conditions under Section 6. Residential status under the Income-tax Act, however, is separate from residential status under FEMA.

For purchase of agricultural land in FY 2027-28, the relevant law is the Foreign Exchange Management Act, 1999 (FEMA) and the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019.

• A person who is a Non-Resident Indian (NRI) or Overseas Citizen of India (OCI) is generally not permitted to acquire agricultural land in India by purchase. Such land can only be acquired by way of inheritance or gift from specified eligible persons.

• However, if Mr. A shifts his permanent base to India and becomes a "person resident in India" under Section 2(v) of FEMA, i.e., he resides in India for more than 182 days during the preceding financial year and comes to/stays in India for an uncertain period with the intention of residing here, carrying on business, employment or vocation in India, then FEMA restrictions applicable to NRIs/non-residents would cease to apply.

Accordingly, if by FY 2027-28 Mr. A qualifies as a "person resident in India" under FEMA and intends to stay in India and undertake agricultural activities on a continuing basis, he may purchase agricultural land in India in the same manner as any other resident Indian, subject to State land laws (including Punjab land ceiling/revenue regulations, if applicable).

Conclusion: Mere satisfaction of the Income-tax residential test is not by itself sufficient. The key determinant for purchasing agricultural land is Mr. A's residential status under FEMA at the time of acquisition. If he has effectively relocated to India and becomes a person resident in India under FEMA, purchase of agricultural land in FY 2027-28 should be permissible, subject to local State laws and title-related compliances.

[YAGAY and SUN]

One practical point to add: before the proposed purchase in FY 2027-28, it would be advisable to document Mr. A's change in residential status under FEMA (e.g., long-term stay in India, Indian bank accounts operated as resident accounts where applicable, intention to reside and carry on agricultural activities in India, etc.). This helps establish that he is a "person resident in India" under Section 2(v) of FEMA on the date of acquisition.

Also, since agricultural land is involved, the transaction should be reviewed for compliance with:

• Applicable Punjab land revenue and tenancy laws;

• Any restrictions on purchase by non-agriculturists, if relevant under State law;

• Proper mutation and title verification of the inherited properties.

Thus, the decisive factor is FEMA residential status at the time of purchase, rather than merely becoming a resident under the Income-tax Act.

[satbir singhwahi]

Thanks Sir

AI Summary

FEMA residency determines whether an overseas Indian can purchase agricultural land, not income-tax residence alone.
A Canadian citizen who has inherited agricultural land and a residential house in Punjab may become resident in India for income-tax purposes if the statutory conditions are met, but that status is separate from FEMA residence. For purchase of agricultural land, the decisive issue is whether the person is a person resident in India under FEMA on the date of acquisition. NRIs and OCIs are generally barred from purchasing agricultural land, while a person who has effectively relocated to India and become resident under FEMA may purchase such land subject to State land laws and local compliance requirements.