It is not permissible for OCI to receive agricultural land as gift from parents
Gift Deed for Overseas Citizen of India (OCI)
Hello Sir, I am seeking advice regarding the receipt of agricultural land from my parents in India through a Gift Settlement Deed. I am an OCI holder. I understand that there is clear guidance available on inheriting agricultural land via a will, but there appears to be some confusion concerning transfers by gift deed, especially for OCI. Is it permissible for an OCI to receive agricultural land by way of a gift deed from their parents? Parents already written a will that agricultural land get passed on to the childerns. But they would like us to take the ownership and they are planning doing a Gift Deedn. Can you pls provide some details on this?
Asked 4 months ago in Property Law
Religion: Hindu
10 Answers
Hello Ajay Sir, Thanks for your Reply. I do have a follow up for you. There are some websites that shows the Agricultural land gift is allowed. So it is bit confusing. My Parents already wrote a will (many years ago) they would like to do the Gift settlement as they have written in their Will. Primary reason being they are getting older and they would like to me to take the ownership sooner. What other options do they have to hand over the agricultural lands? Do I have document or any other literature I can read little more on this?
Asked 4 months ago
Sir, pls see the quick 2 mins youtube vide from Mr. Arun https://www.youtube.com/watch?v=j9QDmL35nEI
Asked 4 months ago
The Reserve Bank of India (RBI) prohibits NRIs and OCIs from acquiring agricultural land, plantation property, or farmhouses in India through purchase or gift
As per FEMA21/2000 RBI rules , an OCI /NRI or PIO cannot acquire agricultural land /farm house/plantation property in India by way of Gift except that gifting of residential and commercial property is permitted from relatives only.
OCI holders CANNOT receive agricultural land through gift deed
Key Points:
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Gift deed: Prohibited for agricultural land to OCI holders
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Inheritance: Only legal way to acquire agricultural land as OCI
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FEMA regulations: Clearly ban agricultural land gifts to OCIs
Bottom Line:
Wait for inheritance through will - it's the only guaranteed legal route for OCI holders to acquire agricultural land.
The parents can transfer their agriculture property to their NTI or OCI children by testamentary disposition i.e., by a Will, which shall take effect after the lifetime of the testator.
However they cannot transfer the agriculture property to their wards in India by any other mode including the registered gift settlement deed during their lifetime.
The Indian law on acquisition of agriculture land by NRI or OCI is very clear that they neither can purchase nor acquire it by gift deed
They can inherit the property as legal heirs of the deceased owner or by operating the Will after the lifetime of the testator.
There's no restriction in a NRI or OCI purchasing residential or commercial property in accordance to the RBI and FEMA guidelines however the restriction is towards the purchase of agriculture property alone.
As per the rbi regulations it can be only inherited by you.
Under Indian law and the regulatory framework under the Foreign Exchange Management Act (FEMA) and Reserve Bank of India (RBI) rules, an Overseas Citizen of India is not permitted to purchase agricultural land, plantation property, or farmhouses in India. This restriction applies not only to purchases but also to transfers by way of a gift during the lifetime of the owner. While an OCI can freely acquire residential or commercial property by way of gift from a relative, agricultural land remains an exception and can only be acquired through inheritance on the death of the owner. For this reason, although your parents may wish to pass on ownership of the agricultural land to you during their lifetime through a gift settlement deed, such a transfer would not be permissible under FEMA in the normal course, and any such gift would run the risk of being invalid if challenged or scrutinised.
On the other hand, inheritance is expressly permitted. If the property passes to you by operation of a valid will or through intestate succession upon the death of your parents, you will be able to lawfully become the owner of the agricultural land as an OCI. Since your parents have already made a will bequeathing the agricultural land to their children, you are already protected in terms of succession rights. If their desire is to have you in effective control sooner, they may consider alternative arrangements short of a formal transfer of title, such as granting you a registered power of attorney to manage, lease, or enjoy the land on their behalf. Another option could be partition within the family among Indian resident heirs, though any such structure would need to comply with state-specific agricultural land laws and FEMA requirements. Seeking specific RBI approval for a lifetime transfer is technically possible but rarely granted in respect of agricultural land.
In practical terms, the cleanest and safest route remains to retain the title in your parents’ names until it devolves to you by inheritance as per their will. This avoids any risk of the transfer being void for contravention of FEMA and ensures that your eventual ownership will be on a firm legal footing. For further reading and clarity, you can refer to the RBI Master Direction on Acquisition and Transfer of Immovable Property in India by NRIs/OCIs, the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018, and commentary on the subject in reputed legal treatises dealing with property law for non-residents.
Being a OCI card holder you can only inherit agricultural land in India and you can't be gifted agricultural land.
