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Leasing Agricultural Land in India: A Guide (2026)
Where leasing is restricted, what the NITI Aayog model law proposes, and how an owner or investor can lease farmland without losing it.
Leasing agricultural land (เคเฅเคทเคฟ เคญเฅเคฎเคฟ เคชเคเฅเคเคพ) sounds simple: the owner keeps title and someone else farms the land for rent. In India it is not simple, because several states restrict who may lease out land, and some tenancy laws let a long-standing tenant claim rights over it. This guide uses the NITI Aayog expert committee report on agricultural land leasing to show the state pattern, and tells owners and investors what to check before signing a lease.
Why people lease farmland
Owners lease land because they live in a city, cannot farm it, or want income without selling. Investors, including NRIs and family offices, ask the same question: can I hold land and earn something from it? Farmers lease in extra land to increase their scale. For a buyer on Farmland India the question is usually "if I buy, can I lease it out while I wait?" The answer depends on the state and on the type of tenure.
Leasing is a use of land, not a transfer of ownership. It is separate from a sale, which is covered in the sale deed guide. It is also separate from licensing someone to use a farmhouse. Our guide on how to sell agricultural land covers the exit side.
The state pattern the NITI committee found
The NITI Aayog expert committee report on agricultural land leasing groups states by how they treat leasing. The groups relevant to our corridor, as we read the report, are:
| Group in the report | States named (our corridor in bold) |
|---|---|
| Leasing limited to certain owners | Bihar, Karnataka, Madhya Pradesh, Chhattisgarh, Uttar Pradesh, Uttarakhand, Himachal Pradesh, Tripura, Telangana, Odisha |
| No explicit ban, but tenants can buy the land after a set period | Punjab, Haryana, Gujarat, Maharashtra, Assam |
| No outright ban, but restrictive terms | Andhra Pradesh, Tamil Nadu, Rajasthan, West Bengal |
| Complete ban | Kerala, Jammu and Kashmir, Manipur |
In the limited-lessor states, the permitted lessors typically include widows, minors, disabled persons and members of the armed forces. The report notes that in the states where tenants can buy the land after a period, owners become reluctant to lease at all. The report is from 2016, so state law may have changed since then. We could not confirm each state's current law.
The Uttar Pradesh Revenue Code, 2006 has a heading on "Lease by a Bhumidhar" and a heading on how a lease is made, terminated and disputed. The scanned text we opened was too poor to read the conditions, so we do not state who may lease or for how long. See our UP ceiling and Revenue Code page.
The main risks of leasing out land
- Tenant rights. In some states a long-standing tenant can claim rights, or a right to buy. The committee flagged adverse possession and tenant purchase as reasons owners avoid formal leases.
- Illegal lease. In a state that limits lessors, a lease by a person outside the permitted groups may not be valid and may risk the owner's own rights. Check state law before you sign.
- Informal arrangements. Oral deals with no record are hard to prove and hard to end.
- Record entries. A cultivator entry in the girdawari or khasra can later be used as evidence of possession. See girdawari in Haryana and girdawari in Punjab.
- Loans. A lease may affect mortgage or loan terms; see land loans in India.
What the NITI model law proposes
The committee proposed a model law that states could adopt. It is a model, not a law that applies by itself. Key provisions, as we read them:
- A lease may be written on agreed terms, and an oral lease is also legal (the report cites sections 3 and 7). Registration under the Registration Act is optional; a written lease may be attested by a village revenue officer, sarpanch or pradhan, a local bank officer, or a notary with two witnesses.
- A lease is not entered in the Record of Rights and does not create or confer any right over the land, including protected tenancy or occupancy right (section 8).
- The land reverts to the lessor automatically at the end of the agreed period, unless renewed by agreement (sections 8 and 9).
- The lessor may sell, gift or mortgage the land, provided the lessee can cultivate until the lease ends (section 9).
- The lessee may borrow from banks without mortgaging the leased land, may get insurance and disaster relief, and may not sublease (section 10).
- Leases are not heritable, with limited exceptions (section 11).
- Disputes go first to mediation or the Gram Panchayat, then to the Tahsildar, then to a Special Land Tribunal (sections 14 to 16).
Whether your state has adopted these ideas, we could not confirm. Unless your state law says so, do not assume that a lease will end without leaving tenant rights.
How to lease land safely: a checklist
- Confirm in your state's law that you are allowed to lease out the land. If you are not in a permitted group in a limited-lessor state, take legal advice first.
- Check the land type and any restriction on the tenure in the record; see types of land in India.
- Put the lease in writing. State the khasra numbers, area, rent, term, crop rules, who pays water and electricity, and what happens at the end.
- Choose registration if your state requires it or your lawyer advises it. Rules under the Registration Act, 1908 apply to leases above a certain length; we could not confirm the threshold from the Act text.
- Keep the lessee off the record as a tenant unless the law requires an entry. Ask the lawyer how that works in your state.
- Collect rent by bank transfer and keep receipts.
- Do not allow subletting. Write this into the lease.
- Take back possession on time and note it in writing.
Tax on rent from agricultural land is a separate question. See tax benefits of agricultural land. Tax rules change; check the current year, because the Income-tax Act, 2025 replaced the 1961 Act for tax years starting 1 April 2026 and we did not verify its provisions on rent.
Leasing a farmhouse or farm for stay
Short stays and farm-stay businesses are different from agricultural leasing. A farm-stay may involve a commercial use of land, which can need land-use permission. See agricultural land vs commercial land and farmhouse rules in India. Water access for a tenant is another issue; see water rights and borewells.
What we could not confirm
We did not open current state tenancy statutes for Haryana, Punjab, Rajasthan, Himachal Pradesh or Uttarakhand, nor the Registration Act text. The state grouping is taken from a 2016 central report. Rules on leasing change, so consult the revenue department and a local lawyer for the state where your land lies.
