GST on PG rent: when PG and hostel accommodation is exempt
By Giridhar Reddy, founder of Domvio, Bengaluru
Published
Renting a house or flat for someone to live in is exempt from GST, but that exemption does not cover PGs and hostels. Since 15 July 2024 a separate entry exempts PG and hostel accommodation of up to ₹20,000 per person per month, if the stay runs for at least 90 days in a row. Above that, GST may apply.
This is general information, not tax advice. Tax rules change, and how they apply depends on your situation. It has not yet been reviewed by a chartered accountant. Have a chartered accountant (CA) check it for your situation before you use or rely on it.
Is GST charged on PG rent?
Usually not, if your beds cost ₹20,000 a month or less and residents stay at least three months. The exemptions for rent are in Notification No. 12/2017-Central Tax (Rate), which lists services that are exempt from GST. Notification No. 04/2024-Central Tax (Rate), in force from 15 July 2024, changed two entries in it.
| Entry | What it covers | What it says about PGs |
|---|---|---|
| Sl. No. 12 | Renting of a residential dwelling for use as a residence | Explanation 2: it does not apply to accommodation in student residences, or to accommodation provided by hostels, camps, paying guest accommodations and the like |
| Sl. No. 12A (new) | Supply of accommodation services worth up to ₹20,000 per person per month, supplied for a minimum continuous period of 90 days | Exempt (Nil GST). This is the entry that covers most PGs and hostels |
So a flat let to a family falls under entry 12. A PG bed or hostel room falls under entry 12A, and is exempt only while both conditions are met.
What do the ₹20,000 and 90-day conditions mean?
- ₹20,000 per person per month. The limit is on the value of the accommodation for each person, not each room. A double-sharing room at ₹14,000 per bed is within the limit, even though the room brings in ₹28,000.
- At least 90 days in a row. The accommodation must be supplied for a minimum continuous period of 90 days. A resident who stays for a month on a short-stay basis does not meet this condition.
- Both conditions together. A ₹25,000 bed for a year, or a ₹9,000 bed for two weeks, is outside entry 12A.
| Bed or room | Stay | Entry 12A exemption? |
|---|---|---|
| Triple sharing at ₹8,500 a month | 11-month agreement | Yes |
| Single room at ₹19,500 a month | 6 months | Yes |
| Single room at ₹22,000 a month | 1 year | No, above ₹20,000 per person per month |
| Double sharing at ₹12,000 a month | 3 weeks for an intern | No, shorter than 90 continuous days |
Food, laundry and other charges
Many PGs charge one amount for the bed, meals and laundry. Whether the ₹20,000 is measured on that whole amount or only on the accommodation, and whether meals are taxed separately, depends on how you bill and is a question for your CA. Write the accommodation charge clearly in your PG agreement and receipts. Our PG rental agreement guide shows how to set out charges.
What about rent before July 2024?
CBIC Circular No. 228/22/2024-GST of 15 July 2024 says the GST Council recommended extending the benefit to past cases. GST on accommodation services from 1 July 2017 to 14 July 2024 is regularised on an "as is where is" basis, where the value was up to ₹20,000 per person per month and the stay was at least 90 continuous days.
"As is where is" generally means tax already paid for that period is not refunded, and tax not paid is not demanded. If you have a notice for an earlier period, show it to a CA.
Does a PG owner need GST registration?
- Only exempt beds. A person engaged exclusively in supplying services that are wholly exempt from tax is not liable to register (CGST Act, section 23(1)(a)). A PG where every bed meets the entry 12A conditions is in this position.
- Some taxable stays. If some of your accommodation falls outside 12A, you must register once your aggregate turnover in a financial year exceeds ₹20 lakh, or ₹10 lakh in special category states (CGST Act, section 22(1)).
- How turnover is counted when you have both exempt and taxable beds, and what rate applies to the taxable ones, are questions for a CA. We have left the rate out because we could not confirm it from an official text.
Not tax advice
This page is general information, checked against the GST notifications and CBIC circular linked here on 21 October 2026. GST rates and exemptions change by notification. Confirm your PG's position with a chartered accountant.
Keep a clear record of each resident's rent
Both conditions in entry 12A are per person: what each resident pays, and how long they stay. A per-bed record of rent and move-in dates is what you would show if asked. It also feeds the rest of your PG licence checklist.
A rent record for every bed
Domvio tracks rent for each PG bed, single, double or triple sharing, reminds residents on WhatsApp three days before rent is due and sends a PDF receipt for every payment, UPI or cash. Domvio does not file GST. See PG management software.
Frequently asked questions
Is GST applicable on PG rent below ₹20,000?
No, if the stay is at least 90 continuous days. Entry 12A of Notification 12/2017-CT(Rate), inserted from 15 July 2024, exempts accommodation up to ₹20,000 per person per month on that condition.
Is PG accommodation a residential dwelling for GST?
No. Since 15 July 2024, Explanation 2 to entry 12 says the residential dwelling exemption does not apply to hostels, paying guest accommodations and the like. PGs rely on entry 12A instead.
Is GST charged on hostel rent for students?
Student residences and hostels are also outside entry 12, but entry 12A covers them when the charge is up to ₹20,000 per person per month for at least 90 continuous days.
Do I need GST registration for my PG?
Not if every bed is exempt, because a person supplying only exempt services is not liable to register. If some stays are taxable, registration is needed once aggregate turnover exceeds ₹20 lakh in a year (₹10 lakh in special category states).
Does Domvio charge GST on rent or file GST returns?
No. Rent goes straight from the resident to your own UPI ID, and Domvio takes no commission. Domvio keeps the payment record and receipts; it does not file GST.
Stop chasing rent every month
Domvio reminds your tenants on WhatsApp, takes rent straight to your UPI ID and sends PDF receipts automatically. Free during early access.