Introduction
The Indian Stamp Act of 1899 was enacted to regulate and levy various statutory stamp duties. It depends on the charge of the device and not the transaction. Stamp duty is levied on tenancy agreements to make them valid and enforceable. So, let’s know about stamp duty on tenancy agreements in India.
Table of Contents
- What Is Stamp Duty for Rent Agreement
- Stamp Duty Applicable to Tenancy Agreements?
- In Indian States, Stamp Duty on Rental Agreements
- Paid Method of Stamp Duty on Rental Agreements?
Due process must be followed to give legal validity to tenancy agreements. You have to pay the required fees and register. To register the tenancy agreement, you will also have to pay stamp duty on it. This article will give you some understanding of stamp duty and tenancy agreements.
What Is Stamp Duty for Rent Agreement
- Stamp duty is a fee imposed by the government when a rental agreement.
- Its purpose is to validate the legal document and make it admissible as evidence in court.
- Stamp duty rates vary by state or country, so it’s crucial to consult local laws or seek legal advice.
- Typically, either the tenant or the landlord pays the stamp duty, depending on local regulations or mutual agreement.
Stamp Duty Applicable to Tenancy Agreements?
Stamp duty is a charge levied by the government on various property transactions. You also have to pay stamp duty when you buy a property and when you enter into a tenancy agreement. Stamp duty is payable as per Section 3 of the Indian Stamp Act, 1899.
In Indian States, Stamp Duty on Rental Agreements
In Indian states, tenancy agreements are subject to stamp duty. The details of stamp duty as per the current situation are given in the table below.
| Area | Agreement time period | Average annual rent of the Amount |
| Gurgaon | Up to 5 years | 1.5% |
| Maharashtra | Up to 5 years | 0.25% of the total rent |
| Uttar Pradesh | Less than a year | 4% of annual rent + deposit |
| Tamil Nadu | Up to 11 months | 1% of rent + deposit amount |
| Karnataka | Up to 11 months | 1% of the total rent + deposit paid annually or Rs 500, whichever is lower. |
| Noida | Up to 11 months | 2% |
| Delhi | Up to 5 years | 2% |
Paid Method of Stamp Duty on Rental Agreements?
Stamp duty on a tenancy agreement is payable with the purchase of stamp paper. Some states provide e-stamping facilities. Stock Holding Corporation of India Limited (SHCIL) is the central record-keeping agency (CRA) appointed by the central government to issue e-stamp certificates in the country.
- Visit SHCIL Website
- Click on an e-stamp services
- Select a state from the drop-down
- Complete the application form and submit it at the authorized collection center along with the payment of the stamp certificate.
| Offline method | Online method | Franking method |
| Some states follow the traditional method of non-judicial stamp paper purchased from stamp vendors. | In our country, in some states like Maharashtra, stamp duty can be paid online through the official government website. | Another widely used method of paying stamp duty is the franking method. The application should be submitted at the bank or any authorized agency along with the stamp duty payable document. |
Conclusion
Understanding stamp duty is essential for both landlords and tenants. Rental agreements must be legally binding, per local regulations. Ensures tenancy agreements are enforceable. For more information, visit Openplot.
Also read: Mumbai Real Estate Market: 2 BHK rentals Are in high demand