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Running a PG in India means following a patchwork of municipal, police, tax and tenancy rules that differ from city to city. This checklist covers what applies to most PG and hostel owners, explains where it comes from, and links to our detailed, sourced guides. It is general information — confirm the current rules with your municipal corporation, local police station and a professional.
The checklist at a glance
| Area | What to do | Detailed guide |
|---|---|---|
| Licences | Municipal trade licence; fire clearance where your building needs it; FSSAI if you run a kitchen | How to start a PG |
| Residents | Police verification of every resident where local orders require it | Tenant police verification by state |
| Agreements | Written agreement for every resident, properly stamped; registered where your state requires | Stamp duty & registration by state |
| Tax | Know whether your beds are GST-exempt and whether you must register | GST on PG rent |
| Money | Receipts for every payment; clear deposit refund terms | Rent receipt generator |
| Safety | Fire extinguishers, exits, CCTV and guard where your city requires them | See below |
| Privacy | Store residents’ ID documents securely and only as long as needed | See below |
1. Licences and registrations
- Trade licence from the municipal corporation is the core permission in most cities. Enforcement is rising — Bengaluru issued closure notices to over 2,000 unlicensed PGs in 2024.
- Fire clearance depends on building height, occupancy and state rules; Bengaluru requires it before issuing a PG trade licence.
- FSSAI registration if you serve food; basic registration covers turnover up to ₹12 lakh.
- Shops & Establishments registration may apply if you employ staff, depending on your state law.
- Property tax and electricity may be charged at commercial rates for PGs in some cities.
2. Police verification of residents
There is no single national law, and no universal “24-hour” deadline. Instead, Police Commissioners and District Magistrates issue local orders under Section 163 BNSS requiring owners to submit tenant details; disobeying them is an offence under Section 223 BNS. Pune police booked 113 landlords and PG operators under it in August 2026. Kerala, by contrast, says it is not mandatory. Most states offer an online portal or app.
See the state-wise guide and use our free verification form.
3. Agreements, stamp duty and registration
- Give every resident a written agreement — an 11-month leave-and-licence style PG agreement is standard.
- It must be stamped as your state requires, even if it does not need registration.
- Maharashtra (leave and licence) and Tamil Nadu (Rent Authority) require registration whatever the term; Kerala reportedly does too.
- Attach signed house rules and keep a copy with the resident’s record.
4. GST
Since 15 July 2024, accommodation up to ₹20,000 per person per month with a continuous stay of 90 days or more is exempt. Taxable stays (above the limit or shorter) are at 5% without input tax credit since 22 September 2025. A PG whose supplies are all exempt does not need GST registration. Full details: GST on PG and hostel rent.
5. Deposits, notice and receipts
- Write the deposit amount, refund timeline and allowed deductions into the agreement. Where a state has adopted the Model Tenancy Act, residential deposits are capped at two months’ rent.
- Deduct only unpaid dues and damage beyond normal wear and tear, and show the resident how you calculated it.
- Issue a receipt for every payment — residents need them for HRA, and they settle disputes.
6. Safety
- Working fire extinguishers, clear exits and safe wiring are basic duties everywhere.
- Bengaluru’s 2024 PG licence conditions add CCTV at entrances and corridors (footage kept 90 days), a 24×7 guard, 135 litres of water per person per day, at least 70 sq ft per resident, and waste segregation.
- Rules are tightening: the Karnataka High Court asked for a consolidated PG safety protocol in September 2026, and Delhi proposed a PG regulation bill the same month.
- Keep a visitor register — a digital guest log works well.
7. Residents’ personal data
India’s Digital Personal Data Protection Act, 2023 places duties on anyone handling personal data. For a PG owner that means common sense, done consistently:
- Collect only the ID and details you actually need.
- Store them securely — not in shared WhatsApp groups or open folders.
- Mask Aadhaar numbers on copies kept for your own records.
- Delete documents you no longer need after a resident leaves.
8. Keep records you can produce
When an inspector, police officer or tax officer asks, you should be able to show, for any resident: their ID, signed agreement and house rules, verification acknowledgement, rent and deposit payments, and receipts. Keeping all of this in one system — for example My PG Manager — turns an inspection from a scramble into a five-minute job.
Frequently asked questions
Is a licence mandatory to run a PG in India?
There is no national PG licence, but most cities require a municipal trade licence, and you may need fire clearance and FSSAI registration. Check with your municipal corporation.
Is police verification of PG residents mandatory?
Where local orders under Section 163 BNSS are in force, yes — and many cities have them. See the state-wise guide.
Do PG owners have to pay GST?
Not on beds up to ₹20,000 per person per month for stays of 90 days or more. Other stays are taxable at 5%.
Does a PG agreement need to be registered?
An 11-month agreement usually needs only stamp duty, except in states such as Maharashtra and Tamil Nadu that require registration whatever the term.
Last reviewed: October 2026. General information, not legal advice.
We build My PG Manager, the app PG and hostel owners use for rooms, tenants, rent collection and WhatsApp reminders. Our guides come from running it with owners across India.
