Renting Your Flat on Airbnb in India: Registration, Society Rules and Tax
India has no national licence for renting your flat on Airbnb. The rules come from your state, your society's bye-laws and tax law. Goa requires registration under its Tourist Trade Act, and Kerala, Himachal Pradesh and Uttarakhand register homestays of up to six rooms. Delhi repealed its B&B law in 2026 and has a new policy in draft. Airbnb deducts 0.1% TDS and pays the GST on unregistered hosts' bookings.
Key takeaways
- Registration is state-by-state. Goa, Himachal, Kerala and Uttarakhand have written schemes; most cities have none aimed at a single rented flat.
- Your society's bye-laws bind you. If they bar commercial use or unapproved subletting, the society can act against short stays.
- Every foreign guest must be reported on Form C through the e-FRRO portal within 24 hours of arrival, and again on departure.
- GST on rooms of up to Rs 7,500 a night is 5% without input credit since 22 September 2025, and the platform pays it for unregistered hosts.
- After fees and running costs, a short-let flat often beats a long lease by less than the headline nightly rate suggests.
Is it legal to rent your flat on Airbnb?
Yes, in the sense that no central law bans it. But three separate layers apply, and a host who ignores one of them can be shut down even if the others are in order:
- State tourism rules. Some states make registration compulsory and ask platforms to remove unregistered listings.
- Your society or RWA. A housing society's bye-laws are binding on members, and many prohibit commercial use of flats or subletting without approval.
- Tax and reporting. GST, income tax, TDS by the platform, and police reporting for foreign guests.
Local land-use rules sit in the background: letting rooms to strangers night by night can look like commercial use of a residential building. Our guide to commercial use of residential property explains how municipalities treat that and what it can mean for property tax and electricity tariffs.
State rules for homestays and short stays
| State | Scheme | Room limit | Fee (as reported) | Notable condition |
|---|---|---|---|---|
| Goa | Goa Registration of Tourist Trade Act, 1982; Homestay and B&B Scheme 2025 | Per scheme | Varies by category | Rented apartments and homestays fall in Category D; the authority can have Airbnb remove unregistered listings |
| Himachal Pradesh | Home Stay Rules, 2025 (notified 25 June 2025) | 6 rooms, 12 beds | Rs 3,000 to Rs 12,000 by area and size; up to Rs 18,000 by category | Gold and Diamond units pay commercial power and water rates; deemed approval after 60 days |
| Kerala | Homestay Classification Scheme | 1 to 6 rooms (2 to 12 beds) | Rs 3,750 application fee | Owner must live in the house; classification valid three years |
| Uttarakhand | Deen Dayal Upadhyaya homestay scheme | 6 rooms, up to 4 beds each | Not verified | Permanent residents who live in the house; registration renewed every five years |
| Delhi | Old B&B Act repealed in 2026; draft Bed & Breakfast Policy, 2026 | Draft: up to 8 rooms or 16 beds | Old scheme: Rs 5,000 gold, Rs 3,000 silver | Draft proposes self-certification and deemed approval after seven working days |
Fees and limits are as reported by the state or by news coverage of each scheme; check the current notification before you apply. Note what these schemes have in common. Most are built for an owner who lives on the premises and lets spare rooms, not for an investor who lets a whole empty flat. Kerala and Uttarakhand say so directly, and Delhi's old scheme required the owner's family to live in the property. A whole-flat Airbnb in a city apartment often fits no scheme at all, which leaves it depending on the society and on tax compliance.
Society bye-laws: the rule that usually decides
For a flat in a co-operative society or an apartment complex, the society is the practical regulator. Legal commentators agree on the principle even where they cite no single leading judgment: bye-laws bind members, and a society whose bye-laws bar commercial activity or unapproved subletting can issue notices, levy the penalties its bye-laws allow, and go to the registrar or a court for an injunction. What a society cannot do is invent a ban that its bye-laws and general body never adopted, or charge penalties it has no power to levy.
Before you list, ask for the society's bye-laws and any general-body resolution on short stays, and read what they say about subletting, visitor registration and security. Many societies accept longer furnished stays where the guest is registered with security, and object to a new face every night. The same verification discipline that applies to a long-term tenant, covered in our tenant police verification guide, is what a society will expect.
Foreign guests: Form C
Any accommodation provider, from a hotel to a private host, must report a foreign guest on Form C through the Bureau of Immigration's e-FRRO portal within 24 hours of arrival, and again at check-out. The duty now sits in the Immigration and Foreigners Act, 2025. Missing it is an offence for the host, with fines and, for repeated breaches, heavier penalties. Register on the portal before your first foreign booking, not after.
Tax: GST, TDS and income tax
GST
Since 22 September 2025, accommodation priced at up to Rs 7,500 per unit per day is taxed at 5% without input tax credit; above that, 18% applies. When a booking comes through a platform such as Airbnb, section 9(5) of the CGST Act makes the platform pay the GST on behalf of an unregistered host. A host who books guests directly needs GST registration only once turnover crosses the Rs 20 lakh threshold.
TDS by the platform
Airbnb deducts TDS at 0.1% of a resident host's gross earnings. This was section 194-O of the 1961 Act; since 1 April 2026 it is section 393(1), table serial 8(v) of the Income-tax Act, 2025. Without a PAN on the account the rate jumps to 5%. The TDS is credited against your final tax.
Income tax
Sources disagree on the head of income. Some advisers treat occasional lets as house property income, which gives the flat 30% standard deduction; others say a host who provides linen, cleaning and meals is running a business, taxable on actual profit after expenses. The more hotel-like your operation, the stronger the business-income view. Take a chartered accountant's view before you file, and keep records of every cost either way.
Worked example: short let vs long lease
A furnished 2BHK that would rent for Rs 35,000 a month on a long lease. On Airbnb, assume Rs 4,000 a night and 45% occupancy, roughly in line with AirDNA's Goa figure of about 42% and its 47% to 55% for busier Goa areas. All other costs below are illustrative assumptions:
| Line | Short let | Long lease |
|---|---|---|
| Nights or months let | 365 x 45% = 164 nights | 11 months (one month vacancy) |
| Gross rent | 164 x Rs 4,000 = Rs 6,56,000 | 11 x Rs 35,000 = Rs 3,85,000 |
| Platform host fee (3%) | Rs 19,680 | Nil |
| Cleaning (82 stays x Rs 600) | Rs 49,200 | Nil |
| Utilities, Wi-Fi, linen (Rs 8,000 a month) | Rs 96,000 | Paid by tenant |
| Net before tax | Rs 4,91,120 | Rs 3,85,000 |
The short let earns about Rs 1.06 lakh more a year, or roughly Rs 8,800 a month, for running a small hospitality business: guest messaging, turnovers, reviews, Form C, and the risk that the society objects. At 35% occupancy the gross falls to 128 x Rs 4,000 = Rs 5,12,000; after a Rs 15,360 fee, Rs 38,400 of cleaning and the same Rs 96,000 of utilities, the net is about Rs 3.62 lakh, below the long lease. Registration fees and commercial utility rates, where they apply, narrow it further.
Who should not do this
- Owners in societies that prohibit it. A notice, penalties and an unhappy neighbour are not worth the margin.
- Owners who live far away. Without a reliable local manager, cleaning and check-ins eat the profit.
- Anyone relying on a home-loan-funded flat's cash flow. Occupancy swings with the season; a long lease is steadier.
- Hosts in cities with weak tourist demand. Compare the long-lease option with our rental yields by city before assuming the short let wins.
Two alternatives are worth a look. A room-by-room or student let, covered in our piece on co-living and student housing, and the sibling guide to starting a PG, trade nightly rates for longer stays. And for comparison, Dubai makes every short-let flat hold a holiday home permit from the tourism department, explained in our holiday home permit guide.
Frequently asked questions
Do I need a licence to list my flat on Airbnb in India?
There is no national licence, but some states require registration. Goa makes rented apartments and homestays register under its Tourist Trade Act and can have unregistered listings removed. Himachal, Kerala and Uttarakhand run homestay schemes of up to six rooms, mostly for owners who live on site. Elsewhere, your society's bye-laws and tax rules are what apply.
Can my housing society stop me from running an Airbnb?
Often, yes. Society bye-laws bind members, and if they bar commercial use of flats or unapproved subletting, the society can issue notices, levy the penalties its bye-laws allow, and seek an injunction. It cannot enforce a ban its general body never adopted. Read the bye-laws and any resolution on short stays before you list.
Who pays GST on Airbnb bookings in India?
For a host who is not registered for GST, the platform pays it under section 9(5) of the CGST Act. Rooms priced up to Rs 7,500 a night carry 5% GST without input credit since 22 September 2025; costlier rooms carry 18%. A host taking direct bookings must register once turnover crosses Rs 20 lakh a year.
How much TDS does Airbnb deduct from Indian hosts?
0.1% of gross earnings for a resident host who has given a PAN, or 5% without one. The provision was section 194-O of the old Act and is now section 393(1) of the Income-tax Act, 2025. The deducted amount shows against your PAN and is set off against your final tax when you file your return.
Is Airbnb income taxed as rent or as business income?
It depends on how you run it, and advisers disagree. Occasional lets are often treated as house property income with a 30% standard deduction. A host providing hotel-style services such as cleaning, linen and meals is more likely to be taxed on business profit after actual expenses. Keep full cost records and take a chartered accountant's view.
If you are deciding whether a flat will earn more on short stays or a long lease, Realty Hunting can help you compare the numbers for your city.
