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How to start a homestay business in India

To start a homestay in India, register it under your state's homestay scheme (most expect the owner to live there and cap rooms at about six), get the local body licence, set up GST if your turnover needs it, prepare for Form C for foreign guests, list on booking sites and your own channels, and keep bookings on one calendar from day one.

Updated · By the InnRow team

Why homestays are growing

NITI Aayog's 2025 report "Rethinking Homestays" put India's homestay market at about ₹4,722 crore in 2024, growing around 11% a year (TravTalk). The government sees homestays as a way to cover a shortfall of more than 2 lakh rooms (Skift).

The checklist

  1. Check your state's scheme. States register homestays rather than license them. Kerala, Goa and Rajasthan run schemes with room caps of about five or six and owner-residence conditions; Karnataka made registration mandatory in 2025; Himachal notified new rules with tiered fees (CalcGuru); Uttarakhand raised its cap to 8 rooms in 2026. See our guides for Kerala, Karnataka and Goa, and the state pages for Himachal Pradesh and Uttarakhand.
  2. Local body licence. Your panchayat or municipality may require a licence or trade registration, and some states offer residential tariffs to registered homestays.
  3. Safety. Fire safety, first aid, CCTV at entrances and police verification are commonly asked for; requirements vary by state.
  4. Money. Mudra loans of up to ₹10 lakh now reach homestays, and some states link subsidies to registration (Realtynmore).
  5. GST. Decide with your accountant whether to register. Read GST on homestays.
  6. Foreign guests. Register on the e-FRRO portal before your first foreign guest. Read Form C.
  7. Guest register. Keep one from the first guest. Read the guest register.
  8. Get found. Create a Google Business Profile, then list on Airbnb, Booking.com, MakeMyTrip and Agoda. Read Google Business Profile for homestays.
  9. Set prices and policies. Read how to price homestay rooms, and use the cancellation policy and house rules templates.
  10. One calendar from day one. Put every booking on one calendar so you never promise a room twice. Try InnRow free.

Questions people ask

Do I need a licence to start a homestay in India?

Most states register homestays under a tourism scheme rather than license them like hotels. Local bodies may also require a licence. Check your state tourism department.

How many rooms can a homestay have?

Most state schemes cap homestays at about five or six rooms, with the owner living on the property.

Can I get a loan for a homestay?

Mudra loans of up to ₹10 lakh can be used for homestays, and some states offer subsidies to registered homestays.

Keep reading

Homestay registration in KeralaHow to register and classify a homestay in Kerala: Diamond, Gold and Silver categories, the online…GST on homestaysGST on homestays and hotel rooms after the 2025 reform: 5% up to ₹7,500 a night without ITC, 18% above with…Form C for homestaysForm C (Form-III) explained for homestay and hotel owners in India: who files, the 24-hour rule, documents,…Homestay softwareRun a 1 to 6 room homestay from your phone: one calendar, no double bookings, GST bills and Form C reminders.

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