Investing in Agriculture land, particularly rural agriculture land, is currently a craze among Indian Investor. The main reason is there is no wealth tax and income tax for income from these land .And also no capital gains in certain situations is payable on sale of agriculture land.
Rural Agriculture Lands
Before investing in rural agriculture land, you need to decide which area to buy it in. If the location or the distance is very fair, there is lot of problem in maintenance. So select land as close to your locations.
Land Ceiling law
The law will be differ from state to state. This will be differ from land to land depending on the quality of land. One can buy rural agricultural land in different parts on India within the permissible ceiling limits. Also some states like Maharashtra, Gujarat, Karnataka, Himachal Pradesh, etc have separate rules with regard to buying immovable property in the form of agricultural land. In this state the agricultural land can be buy only by agriculturist. One solution for this problem is to buy some piece of agricultural land in state like Haryana, Rajasthan and U.P first. That makes you agriculturist and then there is no problem in buying agricultural land in other states.
The agricultural land you are interested in has a clean title. This can be verified by referring to Patwari’s and Tasildar’s records. Mutation deed also be verified. Better to avoid buying agricultural land which is in the name of a minor child or one which is a joint holding. These type agricultural land will create problem in future.
Master Plan of the Area
Check the master plan area to see whether the agricultural land is within the control of DTP(District Town Planner). If it is belong to DTP , one cannot be free to construct farm house or boundary walls without approval of appropriate authority. One should also ensure 4 and 6 of land Acquisition Act.
There is no Capital gain Tax on the sale of agricultural land. Agricultural land now forms a part of the definition of Urban land which become liable to wealth tax .No wealth tax for rural agricultural land. There is no gift tax on gifting the movable or immovable assets including agricultural land.