[ecis2016.org] Here are the answers to some of the frequently asked questions on stamp duty on rental agreements
To provide legal validity to rent agreements, it must also be registered following the due procedure and by paying the necessary charges. To register a rent agreement, you will also need to pay a stamp duty on it. Here is a look at some of the frequently asked questions on stamp duty and rental agreements.
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Do you have to pay stamp duty on rental agreements?
Stamp duty is the government’s charge, levied on different property transactions. You need to pay a stamp duty when you buy a property and also when you go in for a rental agreement. Stamp duty is payable under Section 3 of the Indian Stamp Act, 1899.
Also read all about income tax provisions for TDS on rent
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|
Read also : How is stamp duty in Maharashtra calculated post rebates and premiums on ready reckoner rates
[ecis2016.org] Stamp duty in key tier-2 cities in India
How is the stamp paper value for a rent agreement determined?
Location is the prime factor when it comes to estimating the stamp paper value. The duration of the agreement also plays a role. Stamp duty on short-term and long-term leases are different from state to state. Besides these, your annual rent is also a factor, especially in commercial rent agreements.
Now use ecis2016.org’s tool to generate rent receipt online
Is stamp duty applicable for month-on-month rental stay?
A month-on-month stay can be written on paper, without any registration. Stamp duty on rental agreements is more important for short-term to long-term stays.
What is the stamp duty on a backdated rental agreement?
A rental agreement can be given retrospective effect, within the terms of the agreement. However, stamp duty charges cannot be backdated.
Who should buy a stamp paper for a rental agreement?
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Either the landlord or the tenant can buy the stamp paper and it will continue to be the purchaser’s. If you want to own an original agreement, you must buy the stamp paper yourself. You can otherwise get a photocopy or scanned version from the other party.
What is e-stamping and is it valid?
Yes, e-stamping is available in certain states. In the case of e-stamping, you will not need to physically go and buy a stamp paper for the rental agreement. You can simply log on to the Stock Holding Corporation of India Ltd (SHCIL) website and figure out whether your state offers the facility of e-stamping.
How do I get an online rental agreement?
ecis2016.org has launched an online rental agreement facility. You will no longer need to have your tenant or landlord’s physical presence, to complete the rental agreement process. All you need to do, is fill out the details on Housing Edge, sign the agreement digitally and get your rental agreement e-stamped in seconds.
Also read: Rental agreements go completely digital with ecis2016.org
Why is a rental agreement executed on stamp paper so important?
Most institutions such as banks, gas distribution, HRA claims, vehicle purchase, school applications, telephone connections, etc., will consider your rental address proof, only if it is executed on stamp paper.
Do stamp papers have an expiry date?
Although you can use stamp papers even after six months of purchase, unused ones ideally should be given back to the collector within six months and you could get a refund too. Using old stamp papers is not a good idea.
Is rent agreement registration compulsory?
Rent agreements of one year or more, have to be registered. For agreements of less than a year, only the stamp duty charge is applicable, while registration is not mandatory.
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