As Delhi chokes, farmland on the NCR fringe flourishes

As Delhi and the National Capital Region (NCR) add yet another dubious feather to their cap as the most polluted region in the country, the crisis has reached alarming proportions.

During peak winter months, the Air Quality Index (AQI) routinely slips into the “very poor” or “severe” category. This appalling state of air quality has had an unexpected fallout: a sharp surge in demand for farmlands on the outskirts of Delhi-NCR and in other parts of the country.

While the Union Budget 2026, presented by Finance Minister Nirmala Sitharaman, did not introduce any direct tax incentives for farmland buyers, it placed strong emphasis on agricultural resilience, rural infrastructure and allied sectors. It also reaffirmed existing provisions under the Income Tax Act, which continue to make agricultural land an attractive asset class.

Frustrated by smog-choked skies and mounting health concerns, upper-middle-class and affluent Delhiites are increasingly seeking greener, quieter alternatives. Farmlands in areas such as Alwar in Rajasthan, Meerut in Uttar Pradesh, regions beyond Greater Noida, and other peripheral NCR locations are emerging as preferred destinations. These properties offer clean air, open spaces and the possibility of developing weekend homes or farmhouses amid lush greenery.

According to Nikhil Jain, Managing Director of Bhoomann Developers Pvt. Ltd., which is developing the Anahata Farms community in Alwar and nearby regions, farmland today represents both a lifestyle choice and a sound investment. “It goes without saying that due to ever-rising AQI levels in Delhi and NCR, upper-middle-class and wealthy individuals are buying farmlands and converting them into weekend homes.

Investing in farmlands has also emerged as one of the most lucrative and stable investment avenues. It offers a unique blend of financial growth and sustainability,” says Jain, who is also a qualified Chartered Accountant.

A typical home nestled amid golden fields just beyond Delhi’s bustle is a single-storey brick structure with a terracotta-tiled roof glowing softly in the late afternoon sun. Wide verandas draped in bougainvillea overlook swaying wheat and mustard fields.

Inside, the scent of wood smoke mingles with fresh rotis from the chulha. A charpoy rests under a neem tree as birds chatter in the quiet evening air—offering a peaceful retreat from urban chaos.

Buyers can acquire farmland measuring around 1,000 square yards in the price range of Rs 2–3 crore. This, experts note, is a relative pittance compared to farmland prices within the national capital or its immediate surroundings.

“Under Indian tax laws, rural agricultural land is not considered a ‘capital asset’ under Section 2(14) of the Income Tax Act. As a result, gains from its sale are exempt from capital gains tax, provided the land qualifies as rural and is used for agricultural purposes. Many farmlands in Alwar and the outskirts of Meerut fall under this category,” says S.K. Gambhir, a noted tax consultant.

For instance, if a buyer acquires a five-acre farmland parcel in Alwar for Rs 2 crore and sells it a decade later for Rs 5 crore, the Rs 3 crore appreciation can be fully tax-exempt. Though this provision predates Budget 2026, it aligns well with the government’s broader push towards rural prosperity and agricultural development.

Experts say this trend has accelerated over the past few years and shows no signs of slowing. Many buyers already own one or two residential properties in Delhi, Noida, Gurugram or Greater Noida. With little scope for purchasing agricultural land within the capital, moving outward has become the only viable option.

Dr. D. Gupta of Century Realty points out that rising incomes among professionals, entrepreneurs and senior executives have also contributed to this surge. A new generation of first-time entrepreneurs and high-earning professionals now has surplus capital and is keen to diversify investments beyond conventional apartments.

Infrastructure growth has added another layer of attraction. Connectivity projects such as the Delhi–Mumbai Expressway have significantly improved access to regions like Alwar, pushing up land values while retaining their rural classification—for now. Experts also note that even in cases of land acquisition, compensation received by farmers and landowners remains tax-free, reducing risk and enhancing long-term returns.

Farmland ownership typically allows buyers to hold land along with a farmhouse or vacation home in an agricultural setting. These properties—often surrounded by farms, orchards or landscaped gardens—are used as weekend retreats, second homes and, in some cases, even permanent residences. Farmhouses are usually one or two storeys and offer a distinct rural charm that city homes cannot replicate.

Data suggests that agricultural land in many regions has appreciated at an average annual rate of 10–15 per cent, with select pockets witnessing even higher growth due to urban expansion and infrastructure development.

Jain says demand has surged dramatically. “Without fail, we receive at least half a dozen serious enquiries every day from prospective farmland buyers. On weekends, the number often crosses a dozen. Most already own properties in Delhi-NCR and are actively looking to invest in farmland,” he says.

As work-from-home becomes a lasting trend, more people are expected to buy farmlands outside Delhi and other big cities, building comfortable homes amid nature. They will work remotely, breathe cleaner air, and live far away from the madding crowd and polluted urban centres.

(The author is Delhi-based senior journalist and writer. He is author of Gandhi's Delhi which has brought to the forth many hidden facts about Mahatma Gandhi)