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Introduction
In the realm of non-resident Indians (NRIs) and their engagement with agricultural land, a myriad of questions often arises, prompting a closer examination of the intricacies involved. CA Arun Tiwari, a seasoned expert in NRI taxation, delves into the nuances of this contested topic, shedding light on the prohibitions and allowances that govern the ownership and disposition of agricultural land by NRIs.
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Can NRIs Purchase Agricultural Land?
The unequivocal answer is no. Once an individual attains NRI status, the acquisition of any form of agricultural property is expressly forbidden. This prohibition is designed to prevent the speculative acquisition of agricultural land, a practice that could potentially disrupt the essential agricultural landscape of the country.
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Transformative Transactions:
A common query pertains to the conversion of agricultural land into commercial or non-agricultural land. However, the prohibition on NRIs acquiring agricultural land extends beyond the initial purchase. Even if an NRI were to convert such land, the nature of the transaction remains non-compliant. The underlying motive of such transformations, often driven by speculation, stands at odds with the intended use of the land for agricultural purposes.
Pre-existing Ownership:
An intriguing question emerges regarding NRIs holding agricultural land acquired before obtaining NRI status. Surprisingly, the answer is affirmative. NRIs can retain ownership of agricultural land if acquired prior to their NRI status. Yet, prudence suggests that inherited land, too, should be considered for sale, given the potential for rule changes and misuse of existing provisions.
Navigating the Real Estate Sector as an NRI
While NRIs are barred from engaging in speculative activities related to agricultural land, participation in the real estate sector is permissible, provided the intent is business-oriented rather than speculative. Investments made with the sole purpose of inflating property prices are expressly prohibited. NRIs can engage in various real estate activities, including renting and property development, as long as speculation remains absent.
Legal Realities and Potential Risks
Although some individuals may currently engage in speculative activities without facing immediate repercussions, the legal framework explicitly prohibits such endeavors. NRIs must be cognizant of the risks associated with speculative practices, especially in the real estate and agricultural sectors. The potential impact on the Indian real estate sector could prompt regulatory crackdowns.
Conclusion:
In closing, CA Arun Tiwari’s elucidation serves as a clarion call for prudence among NRIs navigating the complex landscape of agricultural land ownership. Vigilance is paramount, particularly when contemplating transactions involving agricultural land, ensuring alignment with legal frameworks and safeguarding against potential regulatory shifts.