Overview

Unraveling the myriad hues of India's cultural tapestry, the dynamic landscape of short-term rentals is phenomenally transforming the way travelers indulge in the country's rich heritage and beauty. Characterized by convenience, comfort, and cost-effectiveness, these transient accommodations offer an immersive glimpse into India's celebrated diversity, creating a compelling narrative for both domestic and international globetrotters. Far from the stereotypical hotel experiences, these rental spaces epitomize the essence of 'Atithi Devo Bhava' or 'Guest is God' – a cornerstone of Indian hospitality. As this fleeting yet fulfilling sector mushrooms across the length and breadth of India, let's delve deeper to understand its cosmic impact on the country's tourism industry, regional economies, and the cultural panorama. From apartments in bustling metros, to quaint cottages nestled amidst serene hills; the indispensable realm of short-term rentals is adding an exhilarating chapter to India's rich travel diary.

Property
Overview

In India, there is no specific National Association for Short Term Rental (STR) owners. However, there are several organizations that provide similar support, such as the Federation of Hotel & Restaurant Associations of India (FHRAI) and the Association of Service Apartments Providers (ASAP). They work to represent and assist various hospitality and rental business owners, including those managing short term rentals. However, for specific issues related to STRs, many owners often turn to international organizations like VRMA (Vacation Rental Management Association). Also, they rely on support from popular platforms such as Airbnb and Booking.com for assistance and guidance on STR operations.

Property
Interested in learning more about this country? Please complete the form below.

Lodge Compliance may contact me about products and news. I understand I can change my preferences at any time per Lodge Compliance’s Privacy Policy.

Awesome! Your submission has been received!
Oops! Something went wrong while submitting the form.
short term rentals
What are short Term Rentals in the Country?

Short-term rentals in India are a vibrant part of the country's burgeoning hospitality sector, which offers temporary lodging solutions to tourists, business travelers, or even locals seeking distinctive accommodation experiences for a limited time. These rentals, which vary widely from luxurious city-center apartments to quaint countryside cabins, are typically leased out for periods ranging from a few days to a few months. A dynamic alternative to traditional hotel stays, short-term rentals in India provide a personalized and flexible accommodation option, amalgamating comfort, local culture, and unbeatable convenience. They are often hosted on globally recognized platforms like Airbnb and Oyo Homes, underscoring their appeal to diverse demographics seeking a home away from home experience.

What is the maximum length of stay?

The maximum length of stay for short-term rentals in India typically goes up to six months. However, the exact duration can vary based on the landlord's preferences and the city's regulations. It's always important to confirm this with the property owner or the rental agency before making a booking.

Are there National Rules or Regulations Governing Short-Term Rentals in the Country?

In India, the short-term rental market is primarily regulated by state and local laws rather than national ones. However, several general guidelines exist, which homeowners must follow. These generally fall under the Shop and Establishment Act of the respective states. Also, it's the homeowner's responsibility to ensure their rental adheres to local zoning and housing laws and doesn't violate their terms of their mortgage, homeowners association regulations, or lease agreement.

Any income generated from rental property should be declared under the 'Income from House Property' for income tax purposes. Property owners are also required to pay Goods Services Tax (GST) on rental income if the annual aggregate turnover exceeds the tax threshold set by the government. For parties involved in short-term rentals, due diligence is also required to ensure that KYC norms are met to minimize the chance of any illegal activities.

Additionally, some states in India have started to develop policies specifically regarding short-term rentals and platforms like Airbnb. For example, Maharashtra state government has guidelines regulating Bed & Breakfast establishments.

It's also crucial to understand that different rules apply to properties designated as 'commercial' and those designated as 'residential'. This is a complex field with a lot of variables, so it's recommended to seek professional advice or consult a lawyer before conducting short-term rentals in India.

Is there any National Tax that affects short-term rental?

Yes, there is a tax applicable to short-term rentals in India. It's called the Goods and Services Tax (GST). As per the GST law, short-term rentals are considered a service. Therefore, they're subject to a tax rate of 18% if the tariff is more than INR 1000 per day. However, if the annual aggregate turnover is less than 20 lakh INR in a financial year, you are not required to collect GST. Additionally, the Indian Income Tax Act considers income from short term rentals as income from other sources and it is taxable as per the individual's tax slab. Please consult with a tax expert to ensure you are managing your taxes effectively.

permits, license
Are there any Permits, Licenses, or Registrations for Short-term Rentals in the Country?

Yes, there are licenses and regulations that apply to short-term rentals in India, and these may vary from state to state. Generally, it's crucial to comply with laws governing real estate transactions and local ordinances.

  1. Registration under Shops and Establishments Act: The government mandates every state to manage their rentals under the Shops and Establishment Act.

  2. GST Registration: If you rent a residential house for a short term and your aggregate turnover in a financial year exceeds 20 lakhs, you should collect and pay GST.

  3. Rented Property Insurance: This is not mandatory, but many landlords opt to buy rented property insurance in order to cover any potential damage caused to the property by renters.

  4. Agreement/Lease contract: While renting out properties, a written rental agreement should be executed. This serves as a legal document that can be used as evidence in court in case of any disputes.

  5. Other local regulations: Depending on the specific region in India, you might also need to register with the local police station or comply with local tax laws.

It's important to consult with a legal professional to ensure you are adhering to all necessary laws and regulations while renting out your property for short-term stays in India. Compliance can protect you from potential fines, legal action, or disputes with renters. Please note that this information can change, and it's always best to get the most up-to-date information from legal or real estate professionals or government authorities.

Is there any National Association for STR owners in the Country?

In India, there is no specific National Association for Short Term Rental (STR) owners. However, there are several organizations that provide similar support, such as the Federation of Hotel & Restaurant Associations of India (FHRAI) and the Association of Service Apartments Providers (ASAP). They work to represent and assist various hospitality and rental business owners, including those managing short term rentals. However, for specific issues related to STRs, many owners often turn to international organizations like VRMA (Vacation Rental Management Association). Also, they rely on support from popular platforms such as Airbnb and Booking.com for assistance and guidance on STR operations.

National Association for STR Owners

Disclaimer

Lodge compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.

Get started for free in 10 minutes

Equip your business with our best-in-class tool to enhance performance, safety, compliance, and seamless guest check-ins, placing your brand at the heart of your guests' experience.

Request a Demo