Corporate housing in Bangalore

This guide is written for the person who actually arranges the accommodation — an HR or admin lead, a finance manager signing off the invoice, a founder housing a team that has just landed. It covers the four options, the tax treatment of each, and the tenancy rules specific to Karnataka that catch out companies moving people in from other states.

One note on language before anything else. "Corporate housing" is an American term with almost no traction in Indian search. The phrase people in India actually type is "serviced apartments" — so if you are briefing a supplier or searching for options, that is the word that will find them.

What are a company's options for housing an employee in Bangalore?

Four, in practice. The table below compares them on the things that determine the decision — not on price, which varies far too much by area and standard to generalise, but on commitment, deposit and what you have to furnish yourself.

The decision is really about duration and about who absorbs the setup cost. A company-leased flat has the lowest monthly rent of the four and by some distance the highest entry cost — a deposit that can run to ten months, plus furnishing, plus the internal effort of a lease, a registration and a TDS obligation. A serviced apartment inverts that: a higher monthly rate, and effectively no entry cost at all.

How is GST charged on a corporate stay in Bengaluru?

The GST structure for accommodation in India changed on 22 September 2025. There are now two bands, and the one you fall into decides whether anyone in the chain can claim input tax credit.

The threshold is applied per unit per day — not per booking, not per person, and not on the total invoice. A ₹6,000-a-night apartment booked for thirty nights is still in the 5% band.

The place-of-supply trap that costs companies their credit

This is the detail that most often surprises a finance team. Accommodation is treated under GST as a service connected to immovable property, which means the place of supply is always the location of the property. The supplier must therefore charge CGST and SGST — never IGST — even when the guest's employer is registered in another state, and even when the invoice is raised to a head office elsewhere.

The consequence: a company that holds no GST registration in Karnataka cannot use the input tax credit on a Bengaluru stay. A Mumbai-headquartered firm with no Karnataka registration will find that the GST on its employee's Bengaluru accommodation is simply a cost. Asking the property to bill the Mumbai address does not change this, and claiming IGST credit on such an invoice is a common and correctable error.

What tax applies when a company leases a flat for an employee?

Two separate obligations arise, one on the employee and one on the company.

The employee pays tax on it as a perquisite

Accommodation provided by an employer is a perquisite under Section 17(2) of the Income-tax Act, valued under Rule 3 of the Income-tax Rules. CBDT Notification 65/2023 revised that valuation with effect from 1 September 2023.

Where the same accommodation is provided to the same employee for more than one year, the amended rule caps the later years' valuation at the first year's value adjusted by the Cost Inflation Index — so a long posting does not attract a rising perquisite purely because the employee's salary has risen.

The company deducts TDS on the rent

Under Section 194-I, a company paying rent for land or a building deducts TDS at 10%. From FY 2025-26 the threshold is ₹6,00,000 in a financial year, raised from ₹2,40,000. Individuals and HUFs deduct under Section 194-IB instead, where the threshold is ₹50,000 per month.

A serviced apartment invoice is generally a supply of accommodation services rather than rent for a building, which is why it is billed with GST at the accommodation rates above. Where the arrangement is structured as a lease, 194-I is the section to look at. If the distinction matters to your numbers, confirm the treatment of your specific contract with your tax adviser before you sign it.

What deposit and agreement terms should a company expect in Bengaluru?

Karnataka's tenancy rules are unusually landlord-favourable on deposits, and this is the single biggest cash-flow difference between leasing a flat in Bengaluru and leasing one in most other Indian cities.

• Deposits up to 10 months' rent are lawful. The Karnataka Rent Act permits a security deposit of up to ten months' rent — among the highest ceilings in India.
• The Model Tenancy Act 2021 does not override this. It recommends capping residential deposits at two months' rent and non-residential at six, but Karnataka has not adopted it as binding law, so the ten-month ceiling still governs in Bengaluru.
• 11 months is the standard agreement length. An agreement running longer than 11 months must be registered at the sub-registrar's office, so the market has settled on 11 months to avoid compulsory registration.
• Agreements are e-stamped. Karnataka has moved rental agreement stamping to e-stamp format. Stamp duty on an 11-month agreement is commonly quoted at 1% of the total rent plus deposit, subject to a ₹500 cap — confirm the current figure when you execute, as these are revised periodically.

For a single employee on a six-month project, a ten-month deposit against an eleven-month lease is difficult to justify. That gap — real, local and specific to Karnataka — is the main reason serviced apartments take the medium-length corporate stay in this city.

Why do companies put people in HSR Layout?

Because of where it sits relative to the Outer Ring Road tech corridor. HSR Layout is a planned BDA neighbourhood in south-east Bengaluru — Hosur–Sarjapur Road Layout, developed from 1985, pin code 560102, seven sectors — near the convergence of the Outer Ring Road, Hosur Road and Sarjapur Road.

The Outer Ring Road matters more than the neighbourhood does. It runs 60 km, passes directly through HSR Layout, and the IT firms along it generate roughly US$22 billion a year — about 32% of Bengaluru's total IT revenue. If an employee's office is on that corridor, HSR Layout is close to the best-placed residential area in the city.

These are ranges because published sources disagree by several kilometres — HSR Layout and each destination are areas, not points. Our commute guide sets out the routes, the Electronic City Elevated Expressway, the Silk Board double-decker flyover and the Blue Line metro station in detail, and Living in HSR Layout covers the neighbourhood itself sector by sector.

One correction worth carrying into any relocation brief: HSR Layout's own metro station is on the Blue Line (Phase 2A along the ORR, 19.75 km, 13 stations, Central Silk Board to KR Puram), still under construction and targeted for around December 2026. The Yellow Line, which opened on 10 August 2025, does not serve HSR Layout directly — its nearest station is Central Silk Board. Property listings get this wrong constantly.

Which option fits which length of stay?

A rough decision rule, based on where the commitments start to bite rather than on price:

• Up to about two weeks — a hotel. Nothing else is worth the arrangement effort, and daily housekeeping is included.
• Two weeks to about six months — a serviced apartment. No lease, no deposit, no furnishing, a kitchen for someone who does not want to eat out for four months, and a single invoice your finance team can process.
• Six months to a year — genuinely contested. A leased flat is cheaper per month, but the ten-month deposit and the furnishing cost have to be amortised over a stay that may still be cut short.
• Over a year, or a permanent posting — a company-leased flat, or move the employee onto their own lease with an HRA arrangement instead.
• A team arriving together — serviced apartments, usually. Several units in one building keeps people close without committing to multiple leases before you know who stays.

Common questions about corporate housing in Bangalore

Corporate housing is furnished accommodation a company arranges for an employee rather than the employee renting it themselves. In Bengaluru it usually takes one of four forms: a hotel, a serviced apartment, a flat leased in the company's name, or a guest house the company runs itself. In Indian search, most people look for this using the phrase serviced apartments rather than corporate housing.

Since 22 September 2025, accommodation billed at up to ₹7,500 per unit per day attracts 5% GST without input tax credit, and accommodation billed above ₹7,500 per unit per day attracts 18% GST with full input tax credit. The threshold is applied per unit per day, not per booking or per person.

Only if the company holds a GST registration in the same state as the property. Accommodation is treated as a service connected to immovable property, so the place of supply is always where the property is, and the supplier must charge CGST and SGST. A company registered only outside Karnataka cannot use the credit on a Bengaluru stay, regardless of which office address the invoice is raised to.

It is a perquisite under Section 17(2) of the Income-tax Act, valued under Rule 3. For accommodation the employer takes on lease, the taxable value is the lower of 10% of salary or the actual rent the employer pays. That 10% figure replaced an earlier 15% with effect from 1 September 2023 under CBDT Notification 65/2023. Furnished accommodation adds 10% per annum of the cost of the furniture, or the actual hire charges.

Under the Karnataka Rent Act a landlord may lawfully ask for a security deposit of up to 10 months' rent, which is among the highest permitted anywhere in India. The Model Tenancy Act 2021 recommends capping residential deposits at two months' rent, but Karnataka has not adopted it as binding law, so the 10-month ceiling still applies in Bengaluru.

Yes, where the payments cross the threshold. Under Section 194-I a company paying rent for land or a building deducts TDS at 10%. From FY 2025-26 the threshold is ₹6,00,000 in a financial year, raised from ₹2,40,000. Individuals and HUFs deduct under Section 194-IB instead, where the threshold is ₹50,000 per month.