Rent Agreement in India — Clauses, Stamp Duty & TDS

Registration is mandatory only for agreements exceeding 11 months (over one year). These must be registered at the Sub-Registrar's office under the Registration Act, 1908, with both parties present. Agreements of 11 months or less need not be registered in most states, though states like Maharashtra require even leave-and-licence agreements to be registered.

A verbal rent agreement is technically enforceable under the Indian Contract Act, 1872 if the essential elements of a contract are present, but it is extremely difficult to prove in court. Always insist on a written, signed and witnessed agreement. An unregistered written agreement still has far more evidentiary value than a purely verbal understanding.

You typically need the PAN and Aadhaar of both landlord and tenant, proof of ownership of the property, a recent property-tax or utility bill, two witnesses with ID, passport-size photographs, and the correctly valued e-stamp. In states with online e-registration (Maharashtra, Karnataka, Delhi), Aadhaar-based biometric verification replaces a physical visit.

Yes, in several states. Maharashtra offers Aadhaar-based e-registration through the IGR Maharashtra portal, Delhi allows e-stamping via SHCIL-authorised centres, and Karnataka uses the Kaveri Online Services portal. A properly executed online agreement is accepted as legally valid by the courts.

It varies by state. Maharashtra charges 0.25% of the total rent plus deposit for leave-and-licence up to 60 months; Delhi uses a nominal fixed stamp (around Rs 50) for 11-month agreements; Karnataka roughly 0.5% of annual rent plus deposit; Uttar Pradesh around 2% of annual rent. Confirm the current slab with your local sub-registrar, as rates change with state notifications.

The clauses that most often cause disputes: the security-deposit amount and refund timeline, the notice period, maintenance responsibility, the lock-in period, and rent-escalation terms. Also fix the parties' identities (PAN/Aadhaar), a full property description, the rent and due date, and whether sub-letting is allowed. Clear drafting here prevents most landlord-tenant litigation.

There is no single national cap. Some states set limits: Karnataka effectively at 10 months' rent, Maharashtra at 3 months for residential, Tamil Nadu at 2-3 months under its landlord-tenant law. Elsewhere it is negotiated, usually 2-6 months' rent. Always write the deposit amount, refund timeline and deduction conditions into the agreement.

Whatever the agreement specifies — usually 1 month for residential and 2-3 months for commercial. If the agreement is silent, Section 106 of the Transfer of Property Act, 1882 applies: 15 days' notice for a month-to-month tenancy and 6 months for a year-to-year tenancy. Always give notice in writing (email or registered post) to create a record.

It is mandatory in several states including Delhi, Maharashtra, Karnataka and Uttar Pradesh, where the landlord must initiate tenant verification with the local police or state portal. Failure can attract a fine in some jurisdictions. Even where not mandatory, it is strongly recommended as it protects both landlord and tenant.

An individual or HUF tenant (not liable to tax audit) must deduct TDS under Section 194-IB when the monthly rent exceeds Rs 50,000. The rate is 2% (reduced from 5% with effect from 1 October 2024), deducted once in the last month of the tenancy or the financial year, and paid using Form 26QC. No TAN is required, and Form 16C is issued to the landlord. Verify the current rate on incometax.gov.in.

If the landlord is a Non-Resident Indian, Section 194-IB does not apply — you must deduct under Section 195 at 30% (plus applicable surcharge and 4% cess) on the gross rent, regardless of amount, with no Rs 50,000 threshold. The tenant must obtain a TAN, deduct on each payment, deposit the tax and file Form 27Q. The NRI can seek a lower-withholding certificate under Section 197 if the actual liability is less.

Section 194-I applies to businesses and to individuals/HUFs liable to tax audit, at 10% on rent for land or buildings above Rs 2.4 lakh a year, and requires a TAN. Section 194-IB applies to ordinary individuals and HUFs not under audit, at 2% on monthly rent above Rs 50,000, without a TAN. Most salaried tenants paying high rent fall under 194-IB.

Yes, but only under the old tax regime. A salaried employee receiving House Rent Allowance can claim an HRA exemption on rent actually paid, subject to the statutory formula. The default new regime does not allow the HRA exemption. If you pay rent but receive no HRA, a limited deduction is available under Section 80GG, again only in the old regime. Compare both regimes before filing.

Residential property let to an individual for personal use is exempt from GST. GST at 18% applies only when a residential dwelling is rented to a GST-registered business (paid by the tenant under reverse charge) or on commercial property where the landlord is registered. For personal home rentals, no GST is added to your rent.