Deemed Rental on residential land holdings?

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This discussion clarifies that deemed rental rules under Section 22 of the Income Tax Act (ITA) apply specifically to residential houses, not to vacant residential land plots. Holding multiple land plots doesn't trigger other income tax compliance issues beyond potential scrutiny of the source of funds during searches, unlike holding multiple residential properties.

Akshit Jain

Akshit Jain (Querist)
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26 October 2024 If an individual holds more than 2 residential houses, deemed rental rules apply under Section 22 of ITA. Do the rules apply if the individual holds multiple residential land plots i.e. land only with no construction?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 October 2024 No. It is applicable for residential houses.

Akshit Jain

Akshit Jain (Querist)
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26 October 2024 Thank you for clarifying. Are there any income tax consequences of holding multiple land plots other than reporting the same in Schedule AL if it needs to be filed?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 October 2024 No other compliance; but in case of any search/scrutiny the source of funds.

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