What is Passive Income? – How to Earn Passive Income in India


Earning money that requires less or no labor is aspired by all. Passive Income is the word that attunes to many aspirations. Each one of us reading this wants to make a bit more money either through investment, small projects, or freelance work. 

At the initial level, you will need to put in some effort. Some golden things to keep in mind before stepping into the world of passive income.

  • Not Instant: It is Not A Quick Return Thing. Passive Income brings in Cash for sure, but it needs some time and a bit of investment. It can be in the form of money or skills, or both.
  • Labor: Passive Income is not a synonym for free Income. It would be best if you put in some work yourself. It will not involve pressure or your full-time response but will demand a few hours.
  • Taxable: This Income will be taxed separately, as it is shown separately in the financial statement.

In the write-up below, we will guide you about passive income and different ways to earn passive income in India.

Also Read: Key Businesses That Can Help You Earn Money Online In India

What is Passive Income?

Unearned Income or Passive Income is the amount earned automatically with less or no labor. Passive Income is the best way for one to generate extra cash inflow, even while having a full-time job. Passive Income includes earning from rentals and earning from a business that doesn’t include any significant presence.

Though it is easy to earn passive income, it requires a long period of time and accumulation. It is important for financial independence and is the most used tool for early retirement employees.

To clarify, passive income is not lump sum money; rather, it is a continuous flow of money that has continuity over time. Some of the Passive income last for years, decades, or even centuries. 

Therefore, focusing some of your time on passive income sources is beneficial.

Just knowing the meaning of passive income is not enough; therefore, we are listing some effective ways to earn passive income in India.

Also Read: 10 Important Finance Lessons You Can Learn From Your Competitors

Effective Ways to Earn Passive Income In India

There are more than 30 ways to earn passive income in India. We sorted out list of some effective and high return providing passive income. Read along: 

  1. Bank: The best way to earn passive income is by opening a high interest providing savings bank account. Just opening it will not work. You need to deposit some of your savings into it so that it can provide interest. 

Interest in a savings account is passive income, and some banks also offer bonuses for opening accounts. You can check through their policies before opening a savings bank account.

  1. Skillset: Believe it or not, skill is something that can generate huge Passive Income. If you can serve the company with your qualifications, you can assess those skills to start your side hustle. For example, if you are good at consulting on financial matters, you can open your website and post case studies. 

Do not forget to inculcate Google Ads on it. Just like that, you can opt for anything that requires your skills and minimum labor. Remember, passive income is not your 9 to 5 job.

  1. Real Estate: Real Estate brings in great wealth but takes a great amount of time. It will require a lot of capital and expertise, and with all that, it provides a great return on the effort. The property lives and dies on the location; therefore, it is a long-term passive income source. 

For investing in property, you need to find an emerging market and an established market. Property investment has flexibility. As the owner, you can be involved, or you stay hands-off.

  1. Rental Income: One of the most used methods to earn income is rentals. You can rent out your home if you cannot invest in buying a separate property. This method is workable if you have an extra home or floors attached to your own home. 

You can rent some floors and choose to stay with others. This will involve very less investment. The earnings here will be fixed and will depend on the size of the property.

  1. Stocks Investment: Purchasing shares of the company is among the best source of Passive Income. People make lakhs of rupees by investing in the right stock. You will also get dividend income on the shares. Investing some of your time and money in a stock is necessary. Your knowledge and market data understanding will work here. 

If shares are placed right, the return will be high dividends and lasting wealth. There is a risk associated with this as companies sometimes don’t do well, thereby reducing the share price. You can opt for EFT or high-paying dividend stocks to minimize the risk.

  1. Selling Digitally: Digital selling involves downloadable and streamable media. They are templates, plug-ins, PDFs, Printable, e-books, audio or video courses, or UX kits. The content can change here depending upon the latest market trends or requirements. 

You need to put some of your time into creating the product. Your products will be your assets. Their value is very high, and you can sell them as many times as you want.

  1. Blogging: Blogging at first will involve some practice to speed up. If you have your website and great research skills, this is a great way to earn.

You are just required to write a blog for the website and update it regularly. Many companies joined this side hustle and saw 3x changes in their passive Income.

Also Read: Cash Crunch: 7 Tips To Avoid It


Passive Income growth is encouraging in India. The numbers were modest, with figures of $24 billion and 86 passive products. If we talk about the figure 5 years ago, they arranged from $2 billion in assets and 26 products. Progress made by the whole of India is remarkable in this field. 

Also, the figures show that passive Income is not a myth, and anyone with a small investment of time and amount can achieve it.