If I rent out a room in my HDB and pay stamp duty, would IRAS automatically know about my rental income for tax purposes?

Yes, you need to pay income tax on rental income from renting out a room in your HDB flat. Any rent you receive must be declared in your Income Tax Return to IRAS.

IRAS doesn't automatically know about your rental income just because you pay stamp duty on the tenancy agreement. However, they can discover it through:

- Your Income Tax Return filing (you're legally required to declare it)
- Bank transaction records showing regular deposits from your tenant
- Routine audits or compliance checks
- Cross-checks with tenant information or HDB records

You can calculate this in two ways:

1. Actual expenses method – Deduct allowable expenses (mortgage interest, maintenance, fire insurance) from your gross rental income
2. Simplified claim – Deduct a flat 15% of your gross rental income instead of calculating actual expenses

For example, if you rent out one room at $800 monthly, your gross annual income is $9,600. Using the 15% simplification, you'd deduct $1,440, leaving taxable income of $8,160.

Since you're still living in the flat while renting out a room, your HDB remains eligible for owner-occupier property tax rates, which are lower than non-owner-occupier rates.

Declare your rental income honestly in your annual tax filing to avoid penalties.