Agricultural land may be used only for farming unless the state permits a change of use. NA (non-agricultural) land has been converted under the state's process for residential, commercial or industrial use. The term NA is used in Maharashtra and Gujarat; other states call it conversion or change of land use (CLU).
Side by side
Factor
NA land
Agricultural land
Permitted use
Residential, commercial or industrial, as converted
Farming and allied uses
Who can buy
Generally anyone, subject to general law
Restricted in some states; not by NRIs or OCIs
Building
With a building plan approval
Generally only farm structures permitted by the state
Conversion process
Already done
NA permission, DC conversion or CLU, depending on the state
Loans
Plot and construction loans available
Usually only agricultural loans
Capital gains
Taxable as property
Rural agricultural land is not a capital asset; urban agricultural land is
When NA land matters
To build a home or business, buy land already converted to the right use, with the conversion order and an approved layout.
When Agricultural land matters
Buy agricultural land only to farm, after checking the state's rules on who may buy and its classification in the revenue record.
In more detail
Each state has its own law: Maharashtra's Land Revenue Code requires NA permission, Karnataka's requires conversion by the Deputy Commissioner, and Haryana and Punjab grant a change of land use (CLU). Fees and steps differ.
Several states restrict who may buy agricultural land, and the rules change. Non-resident Indians and OCI cardholders cannot buy agricultural land, though they can inherit it.
Area on rural land records may be given in local units such as bigha, whose size differs by state and district. Work from the area in square metres or hectares on the record.
Common questions
Can I build a house on agricultural land?
Generally only after the land is converted under the state's process, and with a building plan approval.
Can an NRI buy agricultural land?
No. NRIs and OCI cardholders cannot buy agricultural land, plantation property or farmhouses, but can inherit them.
What is NA land?
Land permitted for non-agricultural use under the state's land revenue law; the term is common in Maharashtra and Gujarat.
Sources
Maharashtra Land Revenue Code, 1966
Karnataka Land Revenue Act, 1964
Haryana and Punjab planning laws on change of land use (CLU)