The peaceful town of Naugaon located in the Alwar district of Rajasthan is fast developing as one of the favorite farmhouse investment destinations. This is a quiet rural location, close to the Delhi-Mumbai Expressway, with an ideal mix of natural beauty, strategic location and tax-friendly land policies. As the demand of weekend homes, eco resorts and sustainable farming lifestyle is growing, investors are now looking at Naugaon to develop their dream farm houses.
When you are considering the investment in farmhouse in Rajasthan and particularly in Naugaon, you must be familiar with legal and taxation system that applies to agricultural land. To ensure that you make an informed decision, this blog gives you the comprehensive guide on the taxes imposed on agricultural land according to the laws in India such as the land policy in Naugaon and the Rajasthan land policy among others.
Why Choose Naugaon, Alwar for Your Farmhouse?
- Excellent Connectivity
The Delhi-Mumbai Expressway is only a few minutes drive away, making Naugaon a fast track to and fro the main cities, such as Delhi, Gurugram, Jaipur, and Mumbai. - Natural Surroundings
Lush green, silent scenery and close vicinity to wildlife areas such as Sariska Tiger Reserve make Naugaon a serene place that farmhouse buyers are looking towards. - Affordable Gated Farmland Projects
It has become safer as developers are selling gated agricultural plots in the area with basic amenities and legal documents - Tax Benefits and Legal Clarity
Under the Income Tax Act, Naugaon would be considered rural agricultural land in most of the instances and therefore, it would not be liable to capital gains tax under certain conditions..
Legal Definition: What Is Agricultural Land in India?
Agricultural land is defined as a land whose main use is agricultural processes such as crop yields, horticulture or ranching. The Income Tax Act, 1961 differentiates agricultural land into two:
- Rural Agricultural Land – Located away from cities or urbanized areas.
- Urban Agricultural Land – Within or near towns, subject to capital gains tax when sold.
This classification is crucial for understanding capital gains tax, stamp duty, and land use rights.
Land Policy in Naugaon: What You Should Know
Rural Agricultural Classification
Section 2(14) (iii) of the Income Tax Act defines land to be rural agricultural land, and therefore not a capital asset, provided it fulfils the following conditions:
- Outside a municipality or cantonment with a population above 10,000
- Located:
- 2 km away from towns with a population of 10,001–1,00,000
- 6 km away from towns with a population of 1,00,001–10,00,000
- 8 km away from towns with a population above 10,00,000
Naugaon’s Status
As per 2011 Census, the population of Naugaon is roughly 10,050.And in case your farmhouse land is over 7 km (air distance) out of Naugaon municipal area, then it would be considered as rural agricultural land- hence not liable to capital gains tax on resale.
Rajasthan Land Policy and Farmhouse Development
The Rajasthan Land Policy is a policy which gives a framework at the state level in the management of the agricultural and non agricultural land use. The main lessons as a farmhouse buyer:
- Conversion Rules:Agricultural land may be converted to non agricultural purpose (such as building farmhouses) by following legal means that include getting it approved by the local authority.
- Plot Size Regulations: Farmhouses: A minimum plot size, (typically 1 bigha or more, depending on local regulations), may be permitted to have a farmhouse.
- Building Permissions: There are building regulations to be observed in height, covered area and rural building regulations.
- Before construction, always consult local panchayat or municipal bodies to ensure your project aligns with the land policy in Naugaon.
Taxation Benefits for Farmhouse Buyers
1. Income Tax Exemption (Section 10(1))
Agricultural income from the land (like crops, rent, or produce) is fully exempt from income tax in India.
2. Capital Gains Tax
- Rural Agricultural Land: Not treated as a capital asset. Hence, no capital gains tax when sold.
- Urban Agricultural Land: Subject to capital gains based on the holding period.
3. Stamp Duty and Registration
- State-specific Rates: Rajasthan offers reduced stamp duty on intra-family land transfers and for women.
- Check current rates before proceeding with registration.
GST on Agricultural Transactions
Farm-related activities like selling produce, harvesting, or grain warehousing are outside the scope of GST. However:
- If you sell packaged or branded farm products, GST may apply.
- Services by intermediaries and land developers may also attract GST.
Inherited or Gifted Farm Land
Land received as inheritance or gift is not taxed at the time of transfer.
However, if you sell the land, capital gains tax will be calculated based on the original cost to the previous owner.
Important Tips Before Building Your Farmhouse
- Check Distance from Municipality
Ensure your plot is beyond 6–8 km from Naugaon town to enjoy tax exemptions. - Verify Title and Land Use
Ask for legal papers showing the land is officially classified as agricultural. - Apply for CLU (Change of Land Use)
If you plan to build large structures or commercial farmhouses, CLU approval may be required under Rajasthan Land Policy. - Avoid Farm Land in Dispute Zones
Always check local development plans, RIICO industrial zones, or protected zones like forest belts.
Why Naugaon Is Ideal for Weekend Homes and Farm Retreats
- Nature-rich, pollution-free environment
- Close to tourist zones like Sariska, Alwar Fort, and heritage temples
- Gated farmhouse projects with water and electricity infrastructure
- High appreciation potential due to Delhi-Mumbai corridor development
Conclusion
Naugaon, Alwar is not merely a picturesque location, but also a sound investment choice by anyone who wants to construct farmhouse in a legally transparent and future-backed way. Favourable taxation under the Income Tax Act, favourable Rajasthan Land Policy provisions, and an expanding market of those wishing to live green makes this the right time to consider gated farmlands options in this emerging centre.
Investors should always check the land policy in Naugaon, seek professional legal opinion, and deal with reputable developers. Is it that you are fantasizing about weekend getaways, retiring in the nature, or even agri-tourism business? Either way, Naugaon is ready to embrace you with open arms, and guarantee good returns.
FAQs
Yes, but you may need building approval and land use conversion depending on the size and purpose.
Yes, if it qualifies as rural agricultural land (more than 6–8 km from the town), it’s not treated as a capital asset under tax law.
Not usually. But GST may apply to land developers or packaged farm produce businesses.
Check:
Title deed
Patta/khatauni records
No encumbrance certificate
Distance from municipality
Land use classification
