Pricing and Fees Basics for Indian Hosts
Guide 3 of 4 in the BetterBnB starter series. Written by an operator running 7 properties across JP Nagar, Gottigere and Anjanapura in South Bangalore.
Most new hosts set a nightly rate by looking at three nearby listings and picking something in the middle. Then they're surprised by how little lands in the bank.
This guide covers how to set your starting price, what Airbnb deducts, how GST and TDS work for Indian hosts, and a worked example of a month's income so you can see the real margin before you commit.
The short version
- Airbnb now charges most hosts a single fee of about 15.5% of the booking subtotal, deducted from your payout. Guests no longer see a separate Airbnb service fee.
- GST on accommodation up to ₹7,500 a night is 5%, without input tax credit (since 22 September 2025). Above ₹7,500 it is 18%.
- TDS under Section 194-O is 0.1% of the gross amount, deducted by Airbnb. It counts toward your income tax.
- Budget 30 to 40% of gross for fees, taxes, cleaning, maintenance and empty nights.
- Price your first month to win reviews, not to maximise revenue.
What Airbnb takes
Airbnb used to split its fee: the host paid around 3% and the guest paid a separate service fee on top. That model has been retired. Airbnb now uses a host-only fee of around 15.5% on most listings, charged on the booking subtotal (nightly rate plus cleaning fee and any extra-guest fees) and deducted before your payout.
Two consequences:
- The price the guest sees is the price you set. There's no Airbnb fee added at checkout.
- Your effective take is about 84.5% of what you list. If you were pricing as though Airbnb only took 3%, you're earning less than you think. Check the payout breakdown on your next reservation to see your exact rate.
GST: what applies and who pays
From 22 September 2025, GST on accommodation works like this:
| Nightly value per unit | GST | Input tax credit |
|---|---|---|
| Up to ₹7,500 | 5% | Not available |
| Above ₹7,500 | 18% | Available |
"Without input tax credit" means you can't offset GST you paid on things like furniture or supplies against the GST you collect. For most small hosts that's a simplification, not a loss.
Registration threshold: you must register for GST once your aggregate turnover crosses ₹20 lakh in a financial year (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura). Many first-year single-property hosts won't reach it.
Who pays the GST on Airbnb bookings depends on whether you're liable to register. In broad terms, where the host is below the registration threshold, Airbnb as the e-commerce operator collects and pays GST on bookings made through it. Once you're liable to register, the responsibility moves to you. On direct bookings, if you're registered, it's always yours.
This area has changed several times and the details depend on your situation. Confirm with a CA before you file. The Indian Airbnb Playbook covers the full GST and compliance picture.
TDS under Section 194-O
Airbnb, as an e-commerce operator, deducts TDS of 0.1% on the gross amount of your sales through the platform (5% if your PAN isn't linked, so link it). This isn't an extra cost. It shows up in your Form 26AS and counts against your income tax liability when you file.
Setting your starting price
Find your comparables
Search Airbnb for your area, your dates and your guest count. Filter to properties like yours: same number of bedrooms, similar amenities, similar distance from whatever your guests come for. Note 8 to 10 nightly rates for a weekday and a weekend.
Ignore listings with no reviews; you don't know whether anyone books them at that price.
Launch below the market, deliberately
A new listing has no reviews, and guests trust reviews more than photos. Your first job is to get to five good reviews as quickly as possible.
What has worked for us:
- Price 10 to 20% below comparable reviewed listings for your first 4 to 6 weeks.
- Allow 1-night stays at first, to get more bookings and more reviews faster.
- Raise the price in steps after every few reviews, not all at once.
Reviews compound. Once you're at or above a 4.8 rating with a handful of reviews, you can price at or above the market.
Build in the standard adjustments
| Adjustment | Typical range |
|---|---|
| Weekend premium over weekday | 20 to 30% |
| Weekly discount | 15 to 20% |
| Monthly discount | 30 to 40% |
Long-stay discounts matter more in India than many hosts expect. Medical, corporate and relocation stays often run a week or more, and a good weekly rate fills your calendar with fewer turnovers.
Smart Pricing
Airbnb's Smart Pricing will suggest rates based on demand. It's a useful reference, especially for spotting high-demand dates you didn't know about. Don't hand it full control in your first months: set a minimum price you're actually happy with.
Cleaning fee
A cleaning fee covers the cost of each turnover and makes short stays worth taking. Keep it proportionate. A cleaning fee that's a large share of a one-night total puts guests off and shows up in their "value" rating. Some hosts fold it into the nightly rate for exactly this reason.
A worked example
Here's what one month looks like for a 2BHK priced at ₹2,500 a night. The numbers are illustrative; plug in your own.
Assumptions
- Nightly rate: ₹2,500
- Occupancy: 50% (15 nights in a 30-day month), the middle of the realistic first-year range of 40 to 60%
- Airbnb host fee: 15.5%
Single booking: 2 nights plus a ₹500 cleaning fee
| Line | Amount |
|---|---|
| Booking subtotal (2 × ₹2,500 + ₹500) | ₹5,500 |
| Airbnb host fee (15.5%) | −₹852.50 |
| Payout before tax adjustments | ₹4,647.50 |
| TDS under 194-O (0.1%, credited against your income tax) | ≈ −₹5.50 |
GST at 5% is on top of the accommodation price for the guest, not out of your payout.
The month
| Line | Amount |
|---|---|
| Gross from 15 nights at ₹2,500 | ₹37,500 |
| Budget for fees, cleaning, supplies, utilities, maintenance and vacancy (30 to 40% of gross) | ₹11,250 to ₹15,000 |
| Left before rent or EMI, and before income tax | ₹22,500 to ₹26,250 |
Notice that Airbnb's fee alone (about ₹5,800 here) takes up a large part of that 30 to 40%. That's why every booking you can move to a direct channel matters.
If you're renting the property
If you're paying rent on the flat you host, subtract it from that last line. At 50% occupancy and ₹2,500 a night, a ₹20,000 rent leaves very little room. This is why we recommend starting with a property you already own or control, and why the occupancy number in your plan should be the realistic one, not the hopeful one.
Direct bookings: keeping the 15.5%
Once a guest has stayed with you, a repeat booking doesn't need to go through Airbnb. Indian guests are comfortable confirming over WhatsApp and paying by UPI or bank transfer.
On the example above, moving four direct bookings a month from Airbnb to direct saves the host fee on every one of them. A few things to get right:
- Collect payment up front or a clear deposit. Don't hold a date on a promise.
- Send a proper quote showing the nightly rate, nights, cleaning fee, GST where applicable and the security deposit.
- Keep a record of every direct booking and payment. If you're GST-registered, these are your liability.
- Collect ID exactly as you would for an Airbnb guest. Guide 4 covers this.
Don't try to move a guest off Airbnb for a booking they've already started there. That breaks Airbnb's terms. Repeat stays and referrals are fair game.
Pricing mistakes to avoid
- Pricing as though Airbnb only takes 3%. It doesn't any more.
- Copying the most expensive listing nearby. It might not be getting any bookings.
- Never raising your price after you've got reviews. Your launch discount should end.
- No weekly discount. You lose the long stays that make Indian city hosting work.
- A cleaning fee bigger than a night's rate on a one-night stay.
- Ignoring vacancy. Your calendar will not be full. Plan for 40 to 60% in year one.
Key numbers to keep at hand
| Item | Figure |
|---|---|
| Airbnb host-only fee (most listings) | about 15.5% of booking subtotal |
| GST, accommodation up to ₹7,500/night | 5%, no input tax credit |
| GST, accommodation above ₹7,500/night | 18% |
| GST registration threshold | ₹20 lakh (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura) |
| TDS under Section 194-O | 0.1%, 5% if PAN not linked |
| Budget for fees, tax, maintenance, cleaning, vacancy | 30 to 40% of gross |
| Weekend premium | 20 to 30% |
| Weekly / monthly discount | 15 to 20% / 30 to 40% |
All tax and benchmark figures are dated and sourced on The Numbers. This is general information, not tax advice; confirm your own position with a CA.
Next: hosting your first guest
The price is set and the booking comes in. Next: what to send, how to collect ID, how check-in works, Form C for foreign guests, and how to turn a first stay into a five-star review.
Guide 4: Hosting Your First Guest →
Already hosting?
The Indian Airbnb Playbook picks up where this leaves off. It's a 169-page operator's manual covering GST and compliance in detail, housing society bylaws, state-by-state registration, pricing, reviews and ranking, and running operations at more than one property. Written from running seven properties, with regulatory content verified June 2026 and updates included until June 2027.