Paying Guest Rules in India: Complete Guide for Tenants and Landlords (2026)

Paying guest accommodation in India is governed by the Indian Contract Act 1872 and, in states that have adopted it, the Model Tenancy Act 2021. Key rules include a mandatory written PG agreement, a security deposit capped at two months rent, a minimum 30-day notice period to vacate, police verification of every occupant, and the landlord's obligation to not cut services or enter rooms without notice. PG tenants are not the same as regular tenants in law, which changes what protections apply.

Why PG Rules Are Different From Regular Rental Rules

This is the first thing most PG tenants and owners get wrong, and it leads to most of the disputes.

When you rent a flat, you sign a lease agreement and become a legal tenant. That gives you protections under the Rent Control Act of your state, including strong eviction safeguards that make it hard for a landlord to ask you to leave quickly. A paying guest arrangement is structured differently. You are a licensee, not a tenant. You are being given a license to occupy a room, not a right over the property. That one legal distinction changes almost everything about what rights you have and what the owner can enforce.

In practice this means a PG owner can ask an occupant to vacate faster than a flat landlord can. It also means PG disputes are resolved under contract law, not rent control law, unless your state has specifically extended rent control protections to PG arrangements.

This is not a reason to avoid PG accommodation. It is a reason to get everything in writing before you move in.

Legal Basis Icon: Indian Contract Act 1872
PG arrangements are licensing contracts. Both parties are bound by whatever is agreed in writing.

Protection Icon: Model Tenancy Act 2021
States that have adopted this act extend stronger protections to PG occupants including deposit caps and eviction due process.

Agreement Icon: Written Agreement is Non-Negotiable
Without a signed PG agreement, you have almost no legal footing in any dispute on either side.

Verification Icon: Police Verification is Mandatory
Every PG occupant must complete police verification. Skipping this carries penalties for the owner in Maharashtra, Delhi, and other states.

The Legal Framework That Governs PG Accommodation in India

PG accommodation in India sits across three legal frameworks depending on your state and the nature of the arrangement.

The Indian Contract Act 1872 applies universally. Any PG agreement, whether written or verbal, is a contract. If one party breaks the terms, the other can seek remedy in civil court. This is why a clear written agreement matters so much.

The Model Tenancy Act 2021 was approved by the Union Cabinet on 2 June 2021 as a central blueprint for states to adopt. It is not automatically enforceable everywhere. States must pass their own legislation to implement it. Maharashtra, Delhi, Tamil Nadu, Andhra Pradesh, and several other states are in various stages of adoption. Where it applies, the Act caps security deposits, mandates written agreements registered with the District Rent Authority, and establishes formal eviction processes through Rent Tribunals.

State Rent Control Acts vary significantly. Maharashtra has the Maharashtra Rent Control Act 1999. Delhi has the Delhi Rent Control Act 1958. These older acts were written primarily for formal tenancies and do not always cover PG arrangements clearly. Courts in Mumbai have, in several cases, held that a PG arrangement with a clear license agreement falls outside rent control and is governed by contract law alone.

The practical takeaway: if you are in Maharashtra, Delhi, or Karnataka, the rules are more defined and the penalties for non-compliance are real. If you are in a state where the Model Tenancy Act has not yet been adopted, the Indian Contract Act and whatever your written agreement says is what governs you.

PG Agreement Rules: What Must Be in Writing Before You Move In

A PG agreement is the single most important document in the arrangement. Any PG that refuses to give you a written agreement is a PG you should not move into.

Here is what every PG agreement must include to be legally useful:
+ Names and addresses of both the PG owner and the occupant
+ Monthly rent amount with the exact due date and any late payment penalty
+ Security deposit amount and the specific conditions under which deductions can be made
+ Tenure of the arrangement, whether month-to-month or fixed term
+ Notice period required by both parties to end the arrangement
+ List of amenities, services, and meals included in the rent
+ Rules of the property: curfew, visitors, noise, guests, smoking, etc.
+ Maintenance responsibilities — what the owner handles versus what the occupant handles
+ Exit clause specifying conditions for early termination and any penalties
+ Dispute resolution clause specifying how disagreements will be handled

A PG agreement does not have to be registered at a Sub-Registrar's office the way a formal lease must be. However, it must be signed by both parties and ideally notarised to carry weight in a dispute. In Maharashtra, rental agreements above 11 months must be registered online through the state's IGR portal. Many PG owners deliberately keep agreements to 11 months to avoid mandatory registration. This is legal but means you need to be more careful about what the agreement contains.

Security Deposit Rules for PG Accommodation

Security deposit disputes are the most common source of conflict between PG tenants and owners in India. Knowing the rules before you pay is the only way to protect yourself.

Under the Model Tenancy Act 2021, the maximum security deposit for residential accommodation is two months of rent. For states that have adopted this framework, a PG owner asking for more than two months is asking for more than the legal cap.

In practice, actual deposit ranges by city in 2026 are as follows:

City / State Notes	Standard Market Deposit	Legal Cap (if MTA adopted)
Mumbai, Maharashtra MTA adoption in progress. Maharashtra Rent Control Act applies.	1 to 2 months	2 months
Delhi MTA adopted. Penalty for excess deposit.	1 to 2 months	2 months
Bengaluru, Karnataka Karnataka reviewing MTA adoption.	2 to 3 months	2 months
Hyderabad, Telangana No MTA adoption confirmed.	2 to 3 months	Not yet capped
Chennai, Tamil Nadu MTA adoption in progress.	2 months	2 months
Pune, Maharashtra Same as Mumbai.	1 to 2 months	2 months

Beyond the cap, these are the rules that govern deposits in every state:
+ The deposit must be refunded within 7 to 30 days of vacating, depending on your agreement. If the agreement does not specify a timeline, 15 to 30 days is the accepted norm under the Model Tenancy Act.
+ Deductions can only be made for actual, documented damage beyond normal wear and tear, unpaid rent, or unpaid utility bills. A landlord cannot deduct for repainting, minor scuffs, or general aging of the property.
+ Any deduction must be accompanied by a written breakdown. If no breakdown is provided, the full deposit must be returned.
+ If the landlord fails to return the deposit within the agreed timeline, you can approach the District Rent Authority or file in a consumer court.
+ Pay the deposit via bank transfer or UPI only. Cash payment with no receipt gives you almost no legal footing to recover it.

Notice Period Rules: How Much Warning Each Side Must Give

The notice period is where most PG arrangements break down at the end. Tenants leave without warning. Owners ask tenants to vacate without adequate time. Both situations are avoidable.

The standard notice period in PG agreements across India is 30 days, though agreements can specify 15 days for shorter stays or 60 days for longer ones. The key rule is that whatever is written in the agreement is what is legally enforceable.

For tenants:
+ You must give written notice within the agreed period. Verbal notice does not count.
+ If you leave before completing the notice period, the owner can deduct the equivalent days from your security deposit, provided this is stated in the agreement.
+ Send your notice via WhatsApp, email, or written letter and save the record. A timestamp matters if the refund is disputed.

For PG owners:
+ You cannot ask a tenant to vacate without following the notice period stated in the agreement.
+ You cannot change the locks, remove belongings, or cut electricity and water to force a tenant out. Under the Model Tenancy Act, doing so is a punishable offence.
+ If a tenant overstays after proper notice and the notice period has expired, you can approach the District Rent Authority for a fast eviction order rather than filing a lengthy civil case.

One situation worth knowing: if you are in Mumbai and the PG owner needs the property for genuine personal use, they can serve notice under the Maharashtra Rent Control Act with proper documentation. This is different from arbitrary eviction and follows a specific legal process.

Rent Increase Rules: When a PG Owner Can Raise Your Rent

Rent increases in PG arrangements are a common source of friction, especially in cities where property demand rises seasonally, like in June and July when new college admissions hit.

The rules are clear:
+ A PG owner cannot increase rent during an active agreement period unless the agreement itself contains a rent escalation clause specifying the amount and timing of increases.
+ If an escalation clause exists, it is valid and enforceable. Read it before signing.
+ Under the Model Tenancy Act, rent can only be increased once every 12 months, and the owner must give 90 days written notice before any increase takes effect.
+ In states without MTA adoption, there is no statutory cap on how much rent can be increased at renewal. The agreement governs everything.
+ If a PG owner increases rent mid-agreement without a clause allowing it, you can refuse the increase and hold them to the original agreed amount. Put your refusal in writing.
+ A verbal agreement to a rent increase is not binding. If you agreed verbally but did not sign an amendment, the original written rate is what applies.

Police Verification Rules for PG Accommodation

Police verification is mandatory for PG occupants in most major Indian cities, and the responsibility for ensuring it is done falls on the PG owner, not the tenant. However, the occupant must cooperate and provide the required documents.

In Maharashtra and Mumbai specifically: police verification is compulsory under Section 188 of the Indian Penal Code and the Maharashtra Police Act. A PG owner who does not get verification done can be penalised. In Mumbai, verification is done online through the MahaPolice citizen portal or offline at the local police station. The occupant needs to submit a completed Form C with their Aadhaar card, photograph, and proof of origin.

In Delhi: mandatory. Non-compliance can result in an FIR and a penalty of up to Rs 10,000 for the owner.

In Karnataka and Bengaluru: strongly recommended but not strictly mandatory in law. Most PG owners do it regardless for their own protection.

What every PG occupant must provide for verification:
+ Government-issued photo ID (Aadhaar, PAN, Passport or Voter ID)
+ Address proof from place of origin
+ Two passport-size photographs
+ College ID or employer letter (for students and working professionals respectively)
+ Parents' contact information for student occupants in many cities

If a PG owner asks you to not complete police verification, that is a red flag. Legitimate PG owners have nothing to hide and every reason to keep official records.

Rights of PG Tenants: What a Landlord Cannot Do

Even though PG occupants are technically licensees and not tenants in law, they still have substantial rights. These cannot be waived or taken away by what is written in the agreement.

+ A landlord cannot enter your room without prior notice, except in a genuine emergency. Your room is your private space for the duration of your stay.
+ A landlord cannot cut electricity, water, or internet to force you to vacate or to pressure payment. Under the Model Tenancy Act this is a criminal offence, not a civil one.
+ A landlord cannot confiscate your belongings or change the locks while you are still living there.
+ A landlord cannot increase rent arbitrarily during an active agreement.
+ A landlord must provide the amenities specified in the agreement. If meals, Wi-Fi, or housekeeping are written into the agreement and not delivered, you have grounds for a complaint and partial refund.
+ A landlord must return your security deposit within the agreed timeframe with a written account of any deductions. Silence is not a valid reason for non-return.
+ A landlord cannot evict you without the notice period stated in the agreement, regardless of how many complaints they receive from other occupants.

If any of the above are violated, your remedies are the District Rent Authority, the local consumer court, or the civil court depending on the nature of the violation.

Rights of PG Owners: What They Are Entitled to Enforce

PG ownership comes with real risks, and the law gives owners legitimate tools to manage them.

+ An owner can set and enforce house rules on noise, visitors, curfew, cleanliness, and smoking, provided these rules are written in the agreement signed before move-in.
+ An owner can deduct documented damage costs from the security deposit. Normal wear and tear is not deductible, but actual damage with photographic evidence and repair receipts is.
+ An owner can terminate the arrangement if rent is unpaid for two consecutive months, provided they follow the notice procedure in the agreement.
+ An owner can restrict subletting. A PG tenant cannot legally sub-let their room to another person without written permission from the owner.
+ An owner can conduct property inspections with prior notice, typically 24 hours, as long as this is reasonable and not used as harassment.
+ An owner can approach the Rent Tribunal for a fast eviction order if the tenant overstays after the notice period has expired.
+ An owner can charge for damage beyond normal wear and tear at move-out, provided they document it through a joint inspection walkthrough and provide receipts.

PG Rules Specific to Mumbai and Maharashtra

Mumbai has the highest volume of PG accommodation in India and operates under the Maharashtra Rent Control Act 1999 alongside the national Model Tenancy Act framework.

Key Maharashtra-specific rules for PG arrangements:

+ Police verification is compulsory through the MahaPolice portal or local station. Non-compliance is a punishable offence under the Maharashtra Police Act.
+ Rental agreements above 11 months must be registered online through the Maharashtra IGR portal. Most PG owners keep agreements to 11 months specifically to avoid this. If your agreement is 11 months or under, notarisation is sufficient.
+ In 2023 alone, Mumbai saw over 3.33 lakh rental agreement registrations, rising 13 percent in the first half of 2024. The city is increasingly formalising what was previously a largely informal market.
+ The maximum security deposit in Maharashtra is capped at two months of rent under the MTA framework the state is in the process of adopting.
+ A PG owner in Mumbai cannot arbitrarily evict an occupant. Even in a license agreement, a dispute must go through proper notice and, if contested, the Rent Court.
+ Electricity and water disconnection to force vacating is not permitted and can be reported to the local police station.

For Mumbai-specific PG searches and verified listings with documented agreements, BedR's Mumbai PG listings cover Andheri, Vile Parle, Goregaon, Powai, and Marine Lines with all agreements checked at the time of listing.

Can PG Rent Be Claimed as HRA?

This is one of the most searched PG-related questions among working professionals, and the answer is yes with conditions.

Under Section 10(13A) of the Income Tax Act, employees who receive HRA as part of their salary can claim an exemption on the rent they pay, including rent paid for PG accommodation.

The conditions that must be met:

+ You must be receiving HRA from your employer as a salary component.
+ You must be paying rent to a PG owner who is not a family member.
+ The PG owner must declare the rental income in their own tax returns.
+ You must have rent receipts or documented payment records, bank transfer or UPI, showing the amount paid each month.
+ If you are paying more than Rs 1 lakh per year in PG rent (approximately Rs 8,400 per month), you must submit the PG owner's PAN to your employer for the exemption to be processed.

Under TDS rules, if your monthly PG rent exceeds Rs 50,000, you are required to deduct TDS at 5 percent under Section 194-IB before paying the owner and deposit it with the government. This applies to a very small number of PG arrangements but is worth knowing for premium co-living situations.

The easiest way to ensure your HRA claim goes through without issues: pay by UPI or bank transfer, get a signed receipt monthly, and make sure the PG owner knows they need to declare the income.

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Frequently Asked Questions About Paying Guest Rules in India

1. What is the maximum security deposit a PG owner can charge in India?

Under the Model Tenancy Act 2021, the maximum security deposit for residential accommodation including PGs is two months of rent. This applies in states that have adopted the Act, including Maharashtra and Delhi. In states where the Act is not yet adopted, the deposit is governed by what is written in the agreement. Anything above two months in a Mumbai or Delhi PG is above the legal cap and negotiable.

2. What is the maximum security deposit a PG owner can charge in India?

3. What notice period is required before vacating a PG?

The standard notice period in PG agreements across India is 30 days. Some agreements specify 15 days for shorter stays. Whatever is written in the signed agreement is legally enforceable. Notice must be given in writing. Verbal notice does not count and leaves you exposed to deposit deductions for the remaining notice period days.

4. Can a PG owner evict a tenant without notice?

No. A PG owner cannot evict an occupant without following the notice period stated in the signed agreement. They also cannot cut electricity, water, or internet, change the locks, or confiscate belongings to force a vacate. Under the Model Tenancy Act, these actions are punishable offences. If this happens, the tenant can approach the District Rent Authority or local police station.

5. Is police verification mandatory for PG accommodation in India?

Yes in most major cities. In Mumbai and Maharashtra, police verification is compulsory under the Maharashtra Police Act. In Delhi, non-compliance carries a penalty of up to Rs 10,000 and potential FIR. In Bengaluru it is strongly recommended. The responsibility to initiate the verification falls on the PG owner, but the occupant must cooperate and provide documents.

6. Can PG tenants claim HRA on their income tax?

Yes. Under Section 10(13A) of the Income Tax Act, you can claim HRA exemption on PG rent if you receive HRA as part of your salary, pay rent to a non-family-member PG owner, have documented payment records, and the PG owner declares the rental income in their own tax returns. If rent exceeds Rs 1 lakh per year, you must submit the owner's PAN to your employer.

7. What should a PG agreement include?

A PG agreement must include the names and addresses of both parties, the monthly rent and due date, the security deposit amount and refund conditions, the tenure and notice period, the list of amenities and services included, the house rules, the maintenance responsibilities of each party, and the exit and dispute resolution clause. Without these elements, the agreement has limited legal value.