Zoning laws are regulations established by local municipal governments or other authorities at the local level. These laws govern the allocation and utilisation of land as well as the construction of buildings within a specific area.

Through the process of zoning, authorities delineate various zones where distinct patterns of land use are prescribed and enforced.

Why Zoning law?

Zoning laws are found in many places around the world. They are rules that aim to control how land is used in different neighbourhoods. For example, these laws might prevent a store or business from opening up in a residential area. In some areas, zoning laws also set limits on how tall buildings can be by specifying the maximum amount of space they can occupy on a certain plot of land. 

Zoning laws can also determine things like the number of open green spaces, how many buildings can be in an area, what kinds of activities can happen, and the types of businesses allowed in a specific region.

The role of zoning laws in land use and market efficiency 

Zoning laws can also limit the number and type of pets that people can have. For example, in a city neighbourhood, there might be rules against keeping cows or buffaloes as pets, but in a rural area, these rules might not apply. 

In other words, if we allow the market to decide, buildings like tall apartment complexes would be constructed in areas where there is a high demand for housing, and factories would be built in places where it's most economically sensible to have them. The argument is that this approach leads to more efficient land use patterns.

Challenges of zoning laws 

Zoning laws in India sometimes hinder efficient land use practices. The allowed height of buildings is often kept low, even in the busiest cities. 

Moreover, these restrictions are sometimes not strictly enforced. In developed countries, developers are typically required to provide the necessary public facilities when constructing tall buildings. 

However, this is not always the case in major Indian cities. For example, developers may neglect to include sufficient parking spaces in their projects.

Conclusion 

Understanding zoning laws is crucial for navigating land use regulations in India. While these laws aim to control and organise development, challenges such as building height restrictions and enforcement issues need to be addressed to ensure efficient land use and the provision of essential amenities in urban areas. 

Developing a balanced approach that considers market dynamics and public welfare is key to achieving optimal land use patterns and sustainable urban development.

1. Understand the Land Category

• Before investing in land, identify the type of land you're buying.

• Types of Land include in Karnataka are residential plots and agricultural plots.

• Converted land refers to agricultural land that has been legally converted for residential/commercial use.

• Revenue sites: usually hazardous, without approvals.

What You MUST Check

• Check that land use fits your purpose.

• Ask for a DC Conversion certificate for non-agricultural use.

• Avoid unconverted or illegally converted land.

2. Ownership and Title Details Verification

• Essential Ownership Checks

• Obtain the Mother Deed/Title Deed.

• Verify chain of ownership for 20–30 years.

• Confirm whether the property is jointly owned.

• Obtain signatures from all owners/co-owners on the sale agreement.

Warning signs

• The original title deed cannot be produced by the seller.

• Disputes between family members.

• Abrupt ownership changes just before the sale. 

3. Check Legal Clearances & Documents

• Encumbrance certificate

• Khata Certificate / Khata Extract 

• Tax Receipts

• Sale Agreement draft 

• Verify Layout Approvals

• Ensure layout is approved by:

• BDA: Bangalore Development Authority

• BBMP / Municipal Corporation

• Gram Panchayat with proper document

Avoid

Unapproved layouts, plots without official survey numbers and plots based only on notarised documents.

4. Check Encumbrances & Liabilities

What to Check

• The outstanding bank loans on the land.

• Cases filed in the courts or pending disputes.

• Legal claims by relatives or tenants.

• How to Check

• Obtain the EC from the Sub-Registrar Office.

• Check online on the Karnataka land records portal.

5. Understand the Location & Infrastructure

Site-Level Checks

• Ensure the plot has legal road access.

• Match plot boundaries with survey sketch.

• Ensure road width as promised.

• Look for drainage, sewage and electric poles.

• Locality Factors

• Close to schools, markets, and hospitals.

• Water availability: Groundwater levels vary in Karnataka.

• Distance from highways and growth zones.

• Avoid Plots Near

• Lakes or lake buffer zone (highly protected).

• Forest areas or government lands.

• High-tension electrical lines.

6. Confirm Market Value & Pricing

• Compare with the prices of surrounding properties.

• Check the government guidance value or stamp duty value.

• Understand the future development plans for the area.

Be Cautious Of 

• Very low-cost plots - often illegal.

• Pressure sales (“book today or price will increase”).

7. Registration & After-Purchase Formalities

• Get the sale deed registered at the Sub-Registrar's office.

• Pay the stamp duty and registration fees correctly.

• Apply for a Khata transfer to your name.

• Start paying property tax after registration.

• Keep Copies Of

• Registered sale deed

• EC after registration

• Payment 

• All previous owner documents

8. Common Mistakes First-Time Investors Make

• Purchasing plots based on brochures without verifying the approvals.

• Not checking on EC and Khata.

• Buying revenue sites based on the expectation that they will "get approval later."

• Paying a token/advance prior to document verification. Not physically visiting the plot multiple times.

Non-Resident Indians (NRIs) are increasingly looking at non-agricultural (NA) plots in India as a stable and high-growth investment. These lands are legally approved for residential or commercial use, making them far more accessible to NRIs than agricultural properties.

But what exactly can an NRI buy? What rules apply? And how can you safely complete the purchase from abroad?

Here’s a simple guide.

1. NRIs Can Buy NA (Non-Agricultural) Land Without Special Permission

NRIs are allowed to buy non-agricultural land in India.

No special approval from the Reserve Bank of India (RBI) is required.

This includes:

• Residential NA plots
• Commercial NA plots
• Approved layouts in township or plotting projects

NA land is fully legal for NRI purchase and is treated the same as buying residential/commercial property.

2. Payment Rules for NRIs Buying NA Plots

NRIs must follow banking rules under FEMA. Payments can be made only through:

• Inward remittance from abroad
• NRE account
• NRO account
• FCNR account
• Cash payments are not allowed.

This creates transparency and helps with future repatriation of funds.

3. Properties NRIs Cannot Buy

NRIs are restricted from buying:

• Agricultural land
• Farmhouses
• Plantation land

These can only be owned if the NRI inherits them or receives them as a gift.

So, for new purchases, only NA land is allowed.

4. Power of Attorney (POA) Helps If You’re Abroad

If the NRI is not in India during the transaction, they can give a Power of Attorney to a trusted relative, friend or a professional representative.

The POA holder can legally carry out tasks like signing agreements, completing paperwork, and handling registration formalities.

5. Legal Due Diligence: The Most Important Step

Before buying any NA plot, NRIs must confirm that the land is officially converted from agricultural to non-agricultural by the authorities.

✔ Title and Ownership

Check title deeds to ensure the seller has the legal right to sell.

✔ Encumbrance Certificate (EC) for 30 Years

This confirms the land is free from legal disputes or loans.

✔ Approvals & NOCs

Look for:

• Layout approval
• Local authority permissions
• Tax receipts
• Completion certificates (if applicable)
  
• A clean plot saves you from trouble later.

6. Repatriation Rules: What Happens When You Sell?

When an NRI sells an NA plot:

• If purchased using NRE funds
• The original investment amount can be repatriated abroad in foreign currency.
• If capital gains are earned
• The profit must first be credited to an NRO account.
• Repatriation is allowed but within RBI limits.
• If purchased using NRO funds

Repatriation is limited to USD 1 million per financial year, including all assets and income.

7. How Non-Resident Indians Purchase a NA Plot in India

Step 1: Verify that the land is NA

Step 2: Designate a POA (useful but optional)

A general power of attorney facilitates the process.

Step 3: Conduct exhaustive due diligence

To verify documents, approvals, and land history, speak with a legal professional.

Step 4: Put a Sale Contract into Action

This needs to be signed and stamped by the POA holder or both parties.

Step 5: Transfer money through approved channels.

Use NRE/NRO/FCNR accounts or inward remittances. 

Step 6: Register the sale deed

To complete ownership, pay stamp duty and registration charges.

Conclusion

Buying NA plots is one of the simplest and safest real estate investments that NRIs can make in India. With no need for special RBI approval and clear guidelines under FEMA, NA land offers strong potential for appreciation, development, and future returns.

As long as you verify the land status, ensure clean paperwork, and follow proper banking channels, purchasing an NA plot becomes a smooth and secure process for any NRI.

1. Foreign Exchange Rules

• NRIs must follow the FEMA (Foreign Exchange Management Act when investing.
• They can generally buy residential or commercial property, but not agricultural land.
• Inheritance or gifts of property are allowed, even for NRIs.
• Court permission may be needed in very specific cases for farm or agricultural land.

2. Tax Implications

• When selling the property within 2 years, any profit is treated as short-term capital gains — taxed at 30%.
• If the property is sold after 2 years, it falls under long-term capital gains, and the tax rate is 20% (after adjusting for inflation).
• The tax for long-term gains needs to be paid on the full sale value first; later, you can claim a rebate based on the indexed cost.

3. Picking the Right Type of Property

• NRIs should decide whether they want residential or commercial property, depending on their goal (rent-earning, capital growth, personal use).
• Residential properties are currently more popular and in demand, but commercial real estate in good locations can yield strong rental returns.
• It's safer to invest with reputed and trusted builders — check for certifications, government approvals, and track records.

4. Using Power of Attorney (POA)

• Since NRIs may not always be physically present in India, they can appoint a Power of Attorney (POA) to manage the property.
• Choose a trusted person (family or professional) as POA to oversee payments, maintenance, or legal matters.
• Ensure the POA document is legally sound and follows all government compliance to avoid future disputes.

5. Home Loan Options

• NRIs can take home loans in India — typically up to 80% of the property value.
• It’s recommended to use an NRE account when applying for the loan.
• After selling, loan repayment or proceeds can often be managed through NRE / NRO accounts, making it simpler to move money.

Why It’s a Good Time to Invest

• Real estate offers diversification compared to stocks or crypto.
• With research and compliance, NRIs can tap into India’s real estate market and gain from capital growth or rental income.

1. Meaning of Benami Property

• Any asset held in someone else's name, while the actual payment was made by another person, constitutes a benami property.
• The person in whose name the property is registered is called the benamidar.
• Beneficial owner means the real payer or the person who receives the benefit of the property.
• The term applies to: Land, plots, buildings, Farmhouses, vehicles, jewellery, cash, shares, financial assets

2. Why Benami Transactions Are Prohibited

These Benami properties are used to:

• Conceal illegal revenues
• Hide assets
• Evade taxes
• Invest black money in real estate.

3. Types of Benami Transactions

A transaction may be benami if:

• Property is in some other person's name, yet money is provided by some other person.
• The owner denies knowledge of the property.
• The actual source of the funds remains hidden.
• A fictitious name or identity is used in the transaction.

4. What is not Benami

Certain genuine situations are exempt, such as:

• Property held in the name of a spouse or child
• Property held for the benefit of a Hindu Undivided Family.
• Assets held by a trustee, company director, or partner on behalf of the organization.
• Property acquired through known and legal sources of income with proper documentation.

5. Important Provisions of the Benami Property Act

All benami transactions are strictly prohibited.

Authorities are empowered to:

• Investigate
• Attach property
• Freeze transfers
• Confiscate assets
• The law applies to both:
• The nameholder (benamidar)
• The beneficial owner -actual payer-

6. Penalties for Benami Transactions

Penalties under the law are stringent:

• Rigorous imprisonment from 1 to 7 years.
• A monetary penalty of up to 25% of the fair market value of the property.
• For furnishing false information or misguiding the investigations, end
• Imprisonment of between 6 months and 5 years.
• A fine of up to 10 per cent of the property's fair market value.

7. Consequences for Individuals

If involved in a benami deal:

• You lose legal ownership of the property.
• Confiscated property is taken by the government without compensation.
• Both parties can face jail and fines: the real owner and the nameholder.
• Even unknowing participation may lead to investigations and legal problems.

8. Why Understanding Benami Laws Matters

• Prevents buying property that might thereafter be seized.
• Helps in ensuring that real estate transactions are clean, transparent, and compliant.
• Safeguards residents and NRIs from fraudulent or illegal dealings.
• Essential for safe investing in land, plots, and property in India.

Conclusion

Laws on benami property in India are designed to ensure transparency and prevent real estate from being misused for illicit financial dealings. Any property bought in someone else's name, when not clearly, legally, and documentedly justified, can be classified as benami. The penalties are strict, and the government has strong powers to investigate and confiscate such assets. It is very important for every buyer, investor, and especially NRIs who wish to invest in Indian property to understand these rules.

(ITAT) The Income Tax Appellate Tribunal , Chennai Bench, has held that simply owning agricultural land is not sufficient to justify claims of agricultural income. In a significant ruling, the Tribunal upheld the addition of 50% of the assessee’s declared agricultural income as unexplained under Section 68 of the Income Tax Act.

The assessee had filed his return declaring substantial agricultural income.

A search was conducted at his premises, after which assessment proceedings were reopened.

Assessment Officer’s Findings

The taxpayer claimed ownership of about 47 acres of wet and dry land.

However, he failed to provide supporting evidence of cultivation, such as:

• Land-revenue records (Chitta, Adangal)
• Details of agricultural expenditure
• Proof of sale of agricultural produce

Due to lack of documentation, the Assessing Officer treated the entire agricultural income as unexplained credit.

CIT(A) Observations

Only patta documents (land ownership) were submitted; no cultivation-related records were provided.

The assessee was unable to demonstrate actual agricultural operations.

Considering the circumstances, the CIT(A) accepted 50% of the declared agricultural income as reasonable and treated the remaining 50% as unexplained.

ITAT’s Decision

The Tribunal upheld the view of the CIT(A) and dismissed the assessee’s appeals for both assessment years.

Key observations:

Ownership of land does not automatically prove agricultural activity.

No evidence of expenditure, crop details, yield, or sales was produced.

Income claimed as agricultural income must be backed by verifiable records.

The ITAT concluded that treating half of the agricultural income as unexplained was justified.

Key Takeaways

Taxpayers claiming agricultural income must maintain:

• Cultivation records
• Expense details
• Sale receipts or proof of buyers

Mere possession of agricultural land is not enough to support agricultural income claims.

Inaccurate or unsubstantiated claims may lead to additions under Section 68 as unexplained credits.