Tax Obligations

Understanding Tax Obligations for Hosts on Our Platform

As a host on our platform, it’s essential to understand your tax responsibilities. We are not a GST-registered company, but we help you connect with guests and charge a commission for our services. Here’s how taxes work for you:

GST for Hosts

1. GST Registration: If your annual income from renting properties exceeds ₹20 lakhs (or ₹10 lakhs in some states), you need to register for GST. This means you will collect GST from your guests.
2. GST Collection: As a GST-registered host, you are responsible for collecting GST from guests based on the applicable rates. You will pay this GST to the government.
3. Commission Payment: When you pay us a commission, it is calculated as 9% of the tariff excluding GST. This means you pay us 9% of the base price before adding GST.

TDS for Hosts

1. TDS Deduction: If you pay us more than ₹15,000 in commission annually, you must deduct TDS at a rate of 5% under Section 194H of the Income Tax Act.
2. TDS Remittance: You need to deposit this deducted TDS with the government within the prescribed timelines.
3. TDS Certificate: You must issue a TDS certificate (Form 16A) to our platform.

For Hosts Not Registered Under GST

1. No GST Collection: If your income is below ₹20 lakhs, you do not need to register for GST and cannot collect GST from guests.
2. Commission Payment: You still pay us a commission of 9% on the tariff.
3. TDS Obligations: The same TDS rules apply if you pay us more than ₹15,000 in commission annually.

Income Tax Implications

1. Tax Classification: Income from renting properties can be classified under “Income from House Property,” “Profits and Gains from Business and Profession,” or “Income from Other Sources” depending on the nature of the transaction.
2. Tax Calculation: You need to calculate your taxable income by deducting permissible expenses from your gross income. The applicable tax rate is applied to this taxable income to determine your tax liability.
3. Expenses and Deductions: You can deduct expenses directly related to hosting, such as fees charged by our platform, municipal taxes, and interest on loans for property purchase or renovation.

Key Points to Remember

• GST Registration Threshold: ₹20 lakhs (or ₹10 lakhs in some states).
• TDS Threshold: ₹15,000 annually.
• Commission Calculation: 9% of tariff excluding GST.
• PAN is Crucial: Ensure you have a valid PAN to avoid higher TDS rates.