Is PG Rent Tax Free?

Paying Guest (PG) or hostel accommodation in India is not automatically exempt from GST, even though standard residential rentals are. Earlier, hostel/PG stays under Rs. 1,000 per day were exempt but that ended on July 17, 2022. Since then, any PG/hostel service has attracted 12% GST on paying guest accommodation, as confirmed by rulings from the Authority for Advance Rulings.

The GST Council’s 53rd meeting introduced relief effective July 15, 2024, via Entry 12AA: PG/hostel stays under Rs. 20,000 per person per month for a continuous period of at least 90 days are now exempt.

This aligns with prior clarification aimed at easing tax burdens for students and working professionals.

However, this exemption does not apply to stays:

1. Above Rs. 20,000 per month per person, or

2. Below a continuous 90 day stay, or

3. Providing additional services like food or laundry bundled in tariff these may attract GST as composite supplies.

Before July 18, 2022, stays under Rs. 1,000/day were exempt. Ruling since then charges 12% GST on all PG/hostel accommodations.

From July 15, 2024, long‑term stays (≥ 90 days) under Rs. 20,000 per month per person are exempt. Stays not meeting these criteria continue to be taxed at 12% GST.

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No, PG rent is not tax free. Here are the details about

GST on PG

. It's important to note that you can claim House Rent Allowance (HRA) against your PG rent. However, for this deduction, you will need a receipt from your landlord containing their PAN number.

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How to Generate e Way Bill without GST Number

 

After staying in a PG for 3 years, I’d say that you can claim HRA against your PG rent. However, you will need a receipt from your landlord stating his PAN No. For the people who are wondering, how much is the GST on paying guest accommodation, I’d say that 12% has been levied on renting accommodations for hotels /inns /guesthouses, and so on.

It is crucial that your name be on the lease or leave and licence agreement for the apartment. Without it, you won't be able to deduct the rent you paid from your taxes.

Whether you receive a house rent allowance (HRA) from your employer or not, you must meet these criteria in order to deduct rent from your income for tax purposes under section 80GG.

You can learn more about the house rent allowance tax exemption available to salaried people living in rented housing under Section 10(13A) of the Income Tax Act, 1961.

A rental receipt must be provided as proof in order to receive HRA tax relief. The PG rent receipt can be used for tax computation since PG rent is paid to a landlord in exchange for shared living quarters.

if you share housing with your family and they own a PG. You can pay your parents or other family members' rent and provide rental receipts from PG to qualify for the HRA exemption on your yearly income tax return.

Regarding the PG in taxation, I’d say that you will be unable to claim the deduction for rent if you are residing in a PG and making a single payment that includes both your rent and meals. Be sure to separate the payments.

You require the landlord's Permanent Account Number (PAN) if your annual rent payment exceeds one lakh rupees in order to be eligible for a deduction. In such a circumstance, your employer will also need the PAN for tax withheld at source (TDS).

I’d like to conclude my answer here about the GST on paying guest accommodation. I hope this helps:)

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