Taxes on Co-host payout in India

[Deep730]

Hello Everyone!

I am a listing owner on Airbnb and have arranged to give 50% of the total payout to my co-host. However, Airbnb says that I will need to pay taxes on the entire booking amount. For instance, if I receive a booking of 1,000 Rupees and my co-host gets 500 Rupees (50% of the payout), I will still need to file income tax returns on the full 1,000 Rupees.  My co-host will also have to file income tax returns on his 500 Rupees share. 

Is this correct? If so, we both would be filing income tax returns on a combined total of 1,500 Rupees, even though the total payout is only 1,000 Rupees. I'm confused about this, so please help

[Snehal1]

TDS is Deducted on which amount?

[Kia272]

@Deep730 You should pay taxes on your profit only. Paying your co-host is a business expense to you, and would reduce your profit. 

Gross profit minus expenses (payout to co-host) = Net profit. That's what you should be paying taxes on. 

That's how it should work in almost any country. 

[Deep730]

I hope this will happen. Otherwise I'll end up paying a lot taxes

[Lorna170]

@Deep730 You should speak to a tax accountant so that you know how to show your expenses on your tax return.  AirBnB is not going to assist you, and they will not allocate payments and taxes correctly.