Permissions: There other permissions you need to run an Airbnb, depending on the state you live in. However, there is no clarity on that as Airbnb is still a new concept in the Indian commercial and legal environment.
Renting out your home, whether through traditional channels or Airbnb, typically requires “police verification". If you have foreign guests, you will need to send Form C to the Bureau of Immigration of the home ministry. This form can be filed online. In addition, if you operate a multi-room commercial establishment through Airbnb, you may need permissions from the fire department, pollution control board, gram panchayat or municipal corporation and the state tourism department, as well as a shop owner’s licence.
Taxation: Depending on how you run the Airbnb property, you may have to pay tax on it as “income from house property" or “income from business and profession". “If it’s just one or two properties that you are letting out through Airbnb, then income from them will be treated as any other rental income. But if there are multiple properties, the owner is actively engaged in it and it becomes their primary income, then it is considered business income," said Amit Maheshwari, partner, Ashok Maheshwary and Associates LLP, a chartered accountancy firm.
Is it for you?
If you have an unused property or even a few spare rooms that you want to put up for rent, consider going the Airbnb way, since it can fetch you quite a bit of extra revenue. “On average, rental income from residential properties is 1.5-2.5% of property value per annum in metros, and 3.5-4% in tier 2 and tier 3 cities. But Airbnb can give a much higher return, especially if the property is in a city that is a tourist destination, is at a good location and is well-managed," said Samantak Das, chief economist and executive director, research, JLL India, a property consultant firm.
However, unlike a property you rent out, you have to maintain your Airbnb property, invest in repairs and facilities and vet and interact with guests regularly. List on Airbnb only if you have the time and inclination to meet new people and help them make their stay or vacation comfortable. If all goes well, it can be quite rewarding.