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Rent from vacant land

vijay mohan (182 Points)

14 October 2024

Rent from vacant land will come under house property or from other sources

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Rama chary Rachakonda (Master in Accounts & high court Advocate) (8621 Points)
Replied 14 October 2024

Rent earned from vacant land is considered as "Income from Other Sources" and not as "Income from House Property" under the Income Tax Act. Here's why: - "Income from House Property" applies to income earned from buildings or structures, like houses, flats, or commercial properties. - Vacant land, on the other hand, is not considered a "house property" as it does not have any buildings or structures. So, the rent earned from leasing out vacant land is taxed under "Income from Other Sources" (Section 56 of the Income Tax Act). However, if you construct a building or structure on the vacant land and rent it out, the income will then be taxed as "Income from House Property".

Rama chary Rachakonda (Master in Accounts & high court Advocate) (8621 Points)
Replied 14 October 2024

Rent earned from vacant land is considered as "Income from Other Sources" and not as "Income from House Property" under the Income Tax Act. Here's why: - "Income from House Property" applies to income earned from buildings or structures, like houses, flats, or commercial properties. - Vacant land, on the other hand, is not considered a "house property" as it does not have any buildings or structures. So, the rent earned from leasing out vacant land is taxed under "Income from Other Sources" (Section 56 of the Income Tax Act). However, if you construct a building or structure on the vacant land and rent it out, the income will then be taxed as "Income from House Property".

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