Short-Term Rentals in Bengaluru: Rules, Society Bylaws, Tax and Returns

Your 1BHK near a tech park rents for ₹30,000 a month. Then you see similar flats listed on booking apps at ₹3,000 a night and do the obvious sum: thirty nights, ₹90,000. Even half full, that beats a tenant. It is a tempting thought, and plenty of Bengaluru owners have tried it.

The real picture has more moving parts: state registration, what your apartment association allows, GST and income tax, and a long list of costs a tenant normally pays. This guide covers all of them, then puts short-term and long-term letting side by side with ₹ figures.

Is short-term letting legal in Bengaluru?

There is no city-wide ban on renting a flat by the night in Bengaluru, as of November 2026. But "not banned" is not the same as "no rules". Three layers apply.

1. Karnataka homestay registration

Karnataka's Homestay Registration Guidelines, 2025 require every homestay operating in the state to register with the Department of Tourism. In July 2026 the department said more than 500 applications had come in, with each one checked by tourism, police and district officials for safety, cleanliness and basic facilities. Certificates are valid for five years.

The state's idea of a homestay is a home where the owner or family lives on the premises and lets a few rooms, not an empty flat run like a mini-hotel. If you plan to let a whole flat you do not live in, the fit with these rules is unclear, so speak to the tourism department before you list, rather than after a complaint.

2. Your apartment association and bylaws

For flats, this is the rule that bites first. Apartment owners' associations in Karnataka run on their registered bylaws and deed of declaration, and many have restricted or banned short-stay letting because of security and visitor concerns. Typical rules include:

• No lettings shorter than a minimum period, often 11 months
• Every guest's ID to be registered at the gate
• Extra charges for heavy use of amenities, or no amenity access for short-stay guests
• Penalties for owners whose guests break rules

Read your association's bylaws and minutes, and ask the committee in writing. A flat in a building that later bans short stays is back to long-term rent, with a lot of furniture you no longer need. If you are a tenant, you cannot sublet on a booking app without your landlord's written permission.

3. Guest reporting

If you host foreign nationals, you must report their stay to the immigration authorities online within 24 hours of arrival (the Form C requirement). Keep a guest register with ID copies for every stay, Indian or foreign; police and associations ask for it.

Tax on short-term rental income

Income tax

If you simply let the flat and the guest uses it, the income is usually taxed as income from house property, with the 30% standard deduction and municipal tax deducted. Once you add hotel-like services such as meals, daily housekeeping or run several units as a business, it is more likely to be treated as business income. Then you claim actual expenses and depreciation instead of the flat 30%, and file a different return form. The line is drawn on facts, so get a CA's view for your setup.

Booking platforms deduct TDS from host payouts: 0.1% of gross earnings for resident hosts with a PAN, and 5% without one, as of November 2026. This shows up in your AIS, so report the gross booking amount, not just what reached your bank.

GST

• Since 22 September 2025, accommodation priced up to ₹7,500 per unit per night carries 5% GST without input tax credit; above that it is 18%.
• You must register for GST once your turnover crosses ₹20 lakh a year. Turnover means gross booking receipts.
• For many smaller hosts who are not registered, bookings made through an app have the GST collected and paid by the platform under the e-commerce operator rules. Direct bookings are your own responsibility.
• Registered hosts selling through platforms also see TCS deducted on their payouts.

The real numbers: short-term vs long-term

Here is an illustrative comparison for a furnished 1BHK in a busy part of Bengaluru. Your own figures will differ, so plug in yours.

Long-term tenant

• Rent: ₹30,000 a month
• Tenant pays electricity, internet and their own cleaning
• Empty months: perhaps one every two years
• Net to you: close to ₹30,000 a month, before society maintenance and property tax, which you pay in both cases

Short-term let at ₹3,000 a night, 60% occupied (18 nights)

• Gross bookings: ₹54,000
• Platform and payment fees, say 15%: ₹8,100
• Cleaning and laundry between stays: ₹6,000
• Electricity, internet, streaming and AC use: ₹5,000
• Toiletries, tea, coffee and small breakages: ₹2,000
• Wear on ₹6 lakh of furniture, linen and appliances replaced over five years: ₹10,000
• Net to you: about ₹22,900 a month

At 60% occupancy, you earn less than a long-term tenant, and you are the one answering a guest's call at midnight about the Wi-Fi. At 75% occupancy (about 22 to 23 nights), the same maths gives roughly ₹31,000 to ₹32,000, which only just beats the tenant. The break-even sits a little above 70%. If you hand the flat to a management company, which commonly takes 15% to 25% of bookings, the break-even moves higher still.

Short stays earn clearly more only when several things line up: a location with steady weekday business travel and weekend demand, consistently strong reviews, a nightly rate well above ₹3,000, and an owner who manages it closely. Bengaluru also has a large supply of serviced apartments and hotels near the main business districts, which caps what you can charge.

Other things that change the answer

• Seasonality. Business travel dips around Diwali, Christmas and New Year, exactly when leisure cities peak.
• Your time. Check-ins, key handovers, cleaning schedules and reviews are a part-time job.
• Wear and tear. A guest every two or three days ages a flat far faster than one family does.
• Neighbours. One noisy group can start a complaint that ends with the association banning short stays for everyone.
• Loan and insurance. Check that your home loan terms and home insurance cover commercial-style letting.

This is general information, not legal or tax advice; a CA and a property lawyer can check your exact setup. If you are buying a flat with rental income in mind, Skyros Estates can help you shortlist RERA-verified homes in areas with steady tenant demand, and check the association's rules before you commit.