Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified India tax professional before filing.
India · India · Short-term rental taxes
Short-Term Rental Taxes in India
STR income in India is taxed under the Income Tax Act as either 'Income from House Property' or 'Profits and Gains of Business or Profession,' with TDS deducted at source by platforms like Airbnb under Section 194-O.
The 30-Second Answer
- STR income is reported in your ITR (Income Tax Return) — classified as 'Income from House Property' (passive letting) or 'Profits and Gains of Business or Profession' (if services like meals/cleaning are substantial).
- Platforms like Airbnb must deduct TDS at 0.1% of gross earnings under Section 194-O of the Income Tax Act if you provide your PAN; without PAN, the rate rises to 5%.
- GST at 12% applies to STR services where annual turnover exceeds ₹20 lakh (₹10 lakh for special category states); hosts must register and file GST returns.
- India's slab-based income tax rates (0%–30% under the old regime, or 0%–30% under the new regime) apply to net rental income after allowable deductions such as the 30% standard deduction on Net Annual Value.
Deductions
What Indian STR Hosts Can Deduct
Under the 'House Property' head, a 30% standard deduction on Net Annual Value is allowed; under the 'Business' head, actual expenses are deductible.
Under 'Income from House Property,' only municipal taxes paid and a flat 30% standard deduction on Net Annual Value (plus home loan interest under Section 24) are allowed — actual repair/utility costs are not separately deductible. Under the 'Business' head, actual expenses are deductible but depreciation recapture rules apply on sale.
Filing Calendar
Key Dates & Filing Calendar
India's tax year runs April 1 to March 31; ITR filing deadlines depend on whether your accounts require audit.
If you miss the 31 July ITR deadline, you can file a belated return by 31 December of the assessment year, but interest under Section 234A and a late fee under Section 234F (up to ₹5,000) may apply.
Income Tax Department of India — incometaxindia.gov.in; Airbnb Help (Section 194-O TDS)
Tax Treatment
House Property vs. Business Income: Which Head Applies?
How your STR income is classified determines which deductions you can claim and how it interacts with your other income.
Income from House Property
Standard 30% deduction, simpler filing
- Gross Annual Value minus municipal taxes = Net Annual Value (NAV)
- 30% flat standard deduction on NAV allowed under Section 24(a)
- Home loan interest deductible under Section 24(b) — up to ₹2 lakh for self-occupied property
- Loss from house property can be set off against other income up to ₹2 lakh per year
- Simpler record-keeping; no need to maintain full books of accounts
No turnover ceiling — applies based on nature of activity
Profits & Gains of Business or Profession
Actual expense deductions, depreciation allowed
- All actual business expenses (utilities, repairs, management fees, insurance) are deductible
- Depreciation on building, furniture, and equipment claimable under Income Tax Rules
- Requires maintenance of books of accounts; tax audit may be needed if turnover exceeds ₹1 crore (or ₹10 crore for digital transactions)
- GST registration and compliance more clearly required
- Business losses can be carried forward for 8 years
No ceiling — applies when services are substantial
Depreciation
Depreciation for STR Hosts (Business Head Only)
Depreciation is only claimable when STR income is taxed under 'Profits and Gains of Business or Profession,' not under 'Income from House Property.'
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential building (used for business) | 5% per year (WDV method) | Applicable only if property is treated as a business asset; not available under House Property head |
| Furniture & fittings | 10% per year (WDV method) | Beds, sofas, dining sets used in the STR |
| Electrical appliances & equipment | 15% per year (WDV method) | Air conditioners, refrigerators, washing machines |
| Computers / smart home devices | 40% per year (WDV method) | Laptops, smart locks, routers used for managing the STR |
Depreciation rates are per the Income Tax Rules, 1962 (Appendix I), using the Written Down Value (WDV) method. The building rate of 5% applies to residential buildings used for business purposes.
If you sell the property and have claimed depreciation under the business head, the difference between sale price and Written Down Value is taxable as business income (short-term capital gains treatment may not apply). Consult a tax professional before selling.
GST & Local Levies
GST on Short-Term Rentals in India
Goods and Services Tax (GST) applies to STR services above the registration threshold; the rate depends on the declared tariff per unit per day.
India's GST regime treats short-term accommodation services as taxable supplies. The applicable rate depends on the room tariff charged per night. Hosts whose aggregate annual turnover exceeds ₹20 lakh (₹10 lakh in special category states) must register for GST and charge it on bookings.
0%–18% GST depending on nightly tariff
CBIC GST Rate Schedule — cbic.gov.in; Notification No. 11/2017-Central Tax (Rate) as amended
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| GST on accommodation (tariff ₹1,001–₹7,500/night) | Host registers and remits GST via GSTR-1/3B; Airbnb does not collect GST on behalf of Indian hosts | Add 12% GST to your invoice/booking price; file monthly or quarterly GST returns; claim input tax credit on eligible business expenses |
| GST on accommodation (tariff >₹7,500/night) | Host registers and remits 18% GST | Higher rate applies; ensure your listing price reflects whether GST is inclusive or exclusive |
| TDS under Section 194-O | Airbnb deducts 0.1% (with PAN) or 5% (without PAN) and remits to Income Tax Dept monthly | Claim TDS credit in your ITR using Form 26AS / AIS; reduces your final tax liability |
GST registration is mandatory once your aggregate turnover (all taxable supplies) crosses ₹20 lakh in a financial year (₹10 lakh for states like Manipur, Mizoram, Nagaland, Tripura). Even if Airbnb collects payment, the host is the supplier for GST purposes and must comply independently.
Platforms
How Airbnb & Other Platforms Handle Indian Tax
Airbnb withholds TDS under Section 194-O but does not collect or remit GST on behalf of Indian hosts — that remains the host's responsibility.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Yes — deducts TDS under Section 194-O; reflected in Form 26AS / AIS | TDS only (0.1% with PAN / 5% without PAN); does NOT collect GST | Form 16A (TDS certificate) issued quarterly via email |
| Booking.com | No automatic TDS deduction reported for Indian hosts via Section 194-O as of 2024 — verify directly | Does not collect GST on behalf of Indian hosts | Annual payment summary available in partner extranet; no Form 16A |
| MakeMyTrip / Goibibo | May deduct TDS under Section 194-O as Indian e-commerce operators — check your account dashboard | Does not collect GST on behalf of hosts | Payment statements available in host dashboard |
Listing on Multiple Platforms?
Aggregate all income across platforms when calculating your GST turnover threshold (₹20 lakh) and income tax liability. Each platform's TDS deductions will appear separately in your Form 26AS / Annual Information Statement (AIS) — reconcile these before filing your ITR to avoid mismatches that trigger notices from the Income Tax Department.
India's Section 194-O Reporting (equivalent to DAC7)
Under Section 194-O of the Income Tax Act (effective 1 October 2020), e-commerce operators (including Airbnb) must deduct TDS on gross payments made to Indian resident sellers/hosts and file quarterly TDS returns (Form 26Q). This is India's mechanism for platform-level income reporting — analogous to the EU's DAC7 directive.
Airbnb Help Centre — 'Taxes withheld from payouts for listings in India' (airbnb.com/help/article/2883); Income Tax Department Section 194-O
Illustrative P&L: House Property Head
Example for a host earning ₹6,00,000 gross annual rental income, paying ₹30,000 municipal taxes and ₹1,50,000 home loan interest. Tax slab assumed at 20% (old regime).
Record-Keeping
Keep These Records to Stay Audit-Ready
The Income Tax Department can reopen assessments up to 3–10 years back; GST records must be kept for 6 years.
| Keep | How long | Why |
|---|---|---|
| Booking statements / payout reports from all platforms | 6 years | Reconcile with Form 26AS / AIS; prove gross income declared matches platform data |
| Form 16A (TDS certificates from Airbnb) | 6 years | Claim TDS credit in ITR; mismatch with Form 26AS triggers IT notices |
| GST invoices issued to guests and input tax credit records | 6 years (GST Act requirement) | Required for GST audits and to substantiate input tax credit claims |
| Municipal tax receipts, home loan interest certificates | 6 years | Support deductions claimed under Section 24 of the Income Tax Act |
| Expense receipts (repairs, utilities, management fees) — if on Business head | 6 years | Substantiate actual expense deductions; required if accounts are audited under Section 44AB |
| Property purchase documents and depreciation schedule | Permanently + 6 years after sale | Calculate capital gains on eventual sale; support depreciation claimed under Business head |
India's Annual Information Statement (AIS) aggregates data from banks, platforms, and registrars. The Income Tax Department cross-checks your ITR against AIS automatically — ensure your declared income matches what appears in your AIS before filing.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
This page is for educational purposes only and does not constitute tax advice. Indian tax law is complex and changes frequently — consult a qualified Chartered Accountant (CA) for advice specific to your situation. Rates and thresholds are as of the 2024–25 financial year unless otherwise noted.
- Income Tax Department of India — Section 194-O — incometaxindia.gov.in — TDS on e-commerce operators; 0.1% rate with PAN, 5% without PAN
- Airbnb Help Centre — India TDS — airbnb.com/help/article/2883 — 'Taxes withheld from payouts for listings in India'; Form 16A quarterly issuance
- CBIC GST Rate Notifications — cbic.gov.in — Notification No. 11/2017-Central Tax (Rate) as amended; accommodation service GST rates
- Income Tax Act, 1961 — Section 24 — Deductions from income from house property: 30% standard deduction and home loan interest
- Ujjivan Small Finance Bank Blog — Rental Income Tax India — ujjivansfb.bank.in — Overview of rental income taxation under House Property head, 2025
- Income Tax Rules, 1962 — Appendix I (Depreciation) — Depreciation rates: buildings 5%, furniture 10%, electrical appliances 15%, computers 40% (WDV method)
Questions
Frequently Asked Questions — India STR Taxes
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