Inherited farmland in Karnataka: what NRIs can (and cannot) do
FEMA rules, mutation, conversion, and your three real options: hold, sell or develop.
Many NRI families hold ancestral agricultural land on the edges of Bengaluru. As the city has grown, that land has often become very valuable, but it is also exposed to encroachment, title disputes and neglect.
Under FEMA, NRIs and OCIs cannot purchase agricultural land, but they can inherit it and hold it. Inherited land can be sold to a resident Indian, or it can be converted to non-agricultural use and developed.
The first step is always to put the title in order. That means a legal-heir or succession certificate, a family settlement or partition where there are several heirs, and mutation of the RTC (Pahani) records into the heirs' names.
Once the title is clean, the land can be converted for non-agricultural use by applying to the Deputy Commissioner under the Karnataka Land Revenue Act. A layout plan approved by the planning authority, and registration with Karnataka RERA, then allow the land to be sold as plots.
The three options are: hold (lowest effort, ongoing risk), sell raw (fast, lowest value), or develop through conversion or a joint development (highest value, managed by a developer). Most families do best with a professionally managed development.
This article is general information, not legal or tax advice. Rules change, so speak to us or your advisers about your situation.