Rental agreement must also be registered in accordance with the proper procedure and by paying the required fees in order to have legal validity. In order to register a rent agreement, you must also pay stamp duty on it. Here are some frequently asked questions about stamp duty and rental agreements.
Do you have to pay stamp duty on rental agreements?
Stamp duty is a charge levied by the government on various property transactions. When you purchase a home or enter into a rental agreement, you must pay stamp duty. Section 3 of the Indian Stamp Act of 1899 imposes stamp duty.
Stamp duty on rental agreements in Indian states
| Area | Agreement time period | Amount |
| Delhi | Up to 5 years | 2% |
| Noida | Up to 11 months | 2% |
| Karnataka | Up to 11 months | 1% of the total rent plus deposit paid annually or Rs 500, whichever is lower |
| Tamil Nadu | Up to 11 months | 1% of rent + deposit amount |
| Uttar Pradesh | Less than a year | 4% of annual rent + deposit |
| Maharashtra | Up to 60 months | 0.25% of the total rent |
| Gurgaon | Up to 5 years | 1.5% of the average annual rent |
| Gurgaon | 5-10 years | 3% of the average annual rent |
How is the stamp paper value for a rent agreement determined?
When it comes to estimating the value of stamp paper, location is the most important factor. The length of the agreement is also important. The stamp duty on short-term and long-term leases varies by state. Aside from these, your annual rent is a consideration, particularly in commercial lease agreements.
Is stamp duty applicable for month-on-month rental stay?
A month-to-month stay can be written down on paper and not registered. For short-term to long-term stays, stamp duty on rental agreements is more important.
What is the stamp duty on a backdated rental agreement?
Within the terms of the agreement, a rental agreement can be given retrospective effect. Stamp duty charges, on the other hand, cannot be backdated.
Who should buy a stamp paper for a rental agreement?
The stamp paper can be purchased by either the landlord or the tenant, and it will remain the purchaser’s property. You must purchase the stamp paper yourself if you want to own an original agreement. Otherwise, you can obtain a photocopy or scanned version from the other party.
ALSO READ: Stamp duty charges and registration charges in Bangalore, Karnataka
What is e-stamping and is it valid?
Yes, in some states, e-stamping is available. You will not need to go out and buy stamp paper for the rental agreement if you use e-stamping. Simply visit the Stock Holding Corporation of India Ltd (SHCIL) website to determine whether your state offers e-stamping.
