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Homestay or bed and breakfast

Host travellers in spare rooms of your home.

Money to start

Up to ₹50,000

Time it needs

10 to 25 hours a week

Risk

Medium

Works from home

Yes

Explore

What it is, who it suits, what it can pay, how soon, the upside and the risks.

You host guests in spare rooms, often with breakfast and local experiences, booked through apps or directly. Many states run homestay registration schemes, and the Ministry of Tourism lists accommodation on NIDHI+.

Who it suits

  • Families with spare rooms in tourist places
  • Hosts who enjoy guests
  • Hill, beach, heritage and pilgrim towns

Upside

  • Earn from existing rooms
  • Tourists pay for local experiences
  • Strong reviews compound

Risks to know

  • Off-season
  • Guest safety and police reporting
  • Society or local rules

What it can pay

We do not publish a number without a reliable source.

What drives it: Location, season, nightly rate, occupancy, reviews and app commission.

Time to first income

Weeks after listing.

Assess

Skills, money, tools, hours and registrations you need, and a five question fit check.

Skills

  • Hospitality
  • Cleanliness
  • Online communication

Money to start

Furnishing, linen and safety basics.

Tools

  • Clean rooms with attached bath
  • Wi-Fi
  • Booking app account

Time per week

10 to 25 hours a week in season.

Licences and registrations

Tick each one as you get it. Your ticks stay on this device.

Quick fit check

  1. 1.Do you have a clean spare room?
  2. 2.Is your area visited by tourists?
  3. 3.Do you enjoy hosting?
  4. 4.Will you register with the state?
  5. 5.Can you keep rooms spotless?

Answer all five to see how well this fits you.

Run

Your first 30 days to the first rupee: set up, price, get paid, find customers, keep records.

0 of 10 steps done

  1. Days 1 to 7

    Set up

  2. Days 8 to 10

    Price it and get ready to be paid

  3. Days 11 to 24

    Find your first customers

  4. Days 25 to 30

    Record and review

Nurture

Grow and stay compliant: tax, GST, government schemes and the help that fits.

Grow it

  • Add experiences: meals, walks, workshops
  • Add rooms
  • Direct bookings through your own page

Tax: Homestay or paying guest income

Return: ITR-4 (Sugam) with presumptive income, or ITR-3

  • When you provide services with the room (meals, cleaning, linen), the income is usually business income, not just rent.
  • With turnover up to ₹2 crore, Sec 58 of the Income-tax Act 2025 (old Sec 44AD) lets you declare 6% of digital receipts as profit.
  • If you only rent the room bare, it may be house property income instead. A Savvy checks your setup.

GST on stays

Room rent is a taxable service. Register once turnover crosses ₹20 lakh. Rooms up to ₹7,500 a night carry 5% GST without tax credit (from 22 September 2025). Bookings through apps can make the platform liable to pay it.

Government schemes that help

Make it official

Only what this way of earning needs. Free tools are marked; services are done by a TaxSavvy CA.

TaxSavvy serviceGST registrationA Savvy files it and tells you if composition suits you.See how it works →TaxSavvy serviceITR-4 presumptive returnYour return under Sec 58 presumptive tax, filed by a CA.See how it works →TaxSavvy serviceFSSAI registrationBasic registration or a state licence for your food business.See how it works →

Questions

How much can I earn from homestay or bed and breakfast in India?

What drives it: Location, season, nightly rate, occupancy, reviews and app commission.

How long until the first income?

Weeks after listing.

What do I need to start?

Furnishing, linen and safety basics. Registrations: State homestay or bed and breakfast registration, Guest details to local police (Form C for foreigners), GST registration, FSSAI registration.

Which ITR form do I file for this income?

ITR-4 (Sugam) with presumptive income, or ITR-3. When you provide services with the room (meals, cleaning, linen), the income is usually business income, not just rent.

Do I need GST?

Room rent is a taxable service. Register once turnover crosses ₹20 lakh. Rooms up to ₹7,500 a night carry 5% GST without tax credit (from 22 September 2025). Bookings through apps can make the platform liable to pay it.

Which government schemes can help?

PM Mudra Yojana. Each scheme has its own eligibility; check the official site before applying.

Sources

Read on 4 Nov 2026. Limits, rates and fees change: check the official site before you rely on them.

This guide is general information from TaxSavvy, not a promise of income. No legal way to earn is guaranteed or instant. Avoid any offer that asks you to pay to join, recruit others or bet.

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