Rent Agreement in India — Key Clauses, Registration & Stamp Duty

Updated: 3 June 2026 | Transfer of Property Act, 1882 | Registration Act, 1908

A rent agreement is a written contract between landlord and tenant specifying rent, tenure, security deposit, and obligations. In India, agreements for 11 months or less do not require mandatory registration, saving stamp duty and registration fees. Agreements for more than 11 months must be registered at the sub-registrar's office. Tenants paying monthly rent exceeding ₹50,000 must deduct 2% TDS under Section 194-IB of the Income-tax Act.

11 Months

The magic number — agreements ≤ 11 months avoid mandatory registration
Most residential agreements are drafted for 11 months and renewed to avoid registration costs. Monthly rent auto-renews if neither party objects.

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TDS Alert: If monthly rent exceeds ₹50,000, the tenant must deduct 2% TDS under Section 194-IB, obtain a TAN, and file Form 26QC. Failure attracts interest and penalty. NRI landlords are subject to 30% TDS under Section 195 with no threshold.

Types of Rent Agreements in India

MAHARASHTRA & KARNATAKA

Leave and Licence Agreement

Used predominantly in Maharashtra and Karnataka. The landlord (licensor) grants a licence to the tenant (licensee) to use the premises — not a lease. The licensee gets no right of occupancy beyond the agreement term. This structure makes eviction significantly easier for landlords. Governed by the Maharashtra Rent Control Act, 1999 in Maharashtra. Stamp duty in Maharashtra: 0.25% of [total rent + deposit] for up to 60 months.

ALL OTHER STATES

Rental Agreement (Lease)

A conventional tenancy agreement creating a landlord-tenant relationship under the Transfer of Property Act, 1882. Tenant acquires right of occupancy for the lease period. Governed by respective state Rent Control Acts. Stamp duty rates and registration requirements vary by state. Delhi: stamp duty is ₹50 for 11-month agreements; Punjab, Haryana: based on annual rent.

Essential Clauses in Every Rent Agreement

Clause	What to Specify	Why It Matters
Parties	Full names, PAN, Aadhaar, contact details of landlord and tenant	Identity verification; needed for TDS & police verification
Property Description	Complete address, flat/plot number, area in sq ft, amenities included	Prevents disputes over scope of tenancy
Rent Amount & Due Date	Monthly rent in ₹, due date (e.g., 5th of each month), mode of payment	Basis for TDS calculation and eviction for non-payment
Security Deposit	Amount, refund timeline, conditions for deduction	Most common source of landlord-tenant disputes
Tenure	Start date, end date, renewal terms	Determines if registration is mandatory
Notice Period	Number of days/months notice by either party to terminate	Avoids abrupt eviction or vacancy
Maintenance Responsibility	Who pays for minor repairs, major repairs, society maintenance	Common dispute area; clarify plumbing, electrical, painting
Sub-letting	Whether tenant can sub-let; usually prohibited without written consent	Protects landlord from unknown occupants
Lock-in Period	Minimum period before either party can terminate	Protects landlord from premature vacancy; tenant from sudden eviction
Rent Escalation	Annual increment percentage (typically 5-10%)	Avoids disputes on renewal

Stamp Duty on Rent Agreements — State-wise

State	Agreement Type	Stamp Duty	Registration
Maharashtra	Leave & Licence (up to 60 months)	0.25% of (total rent + deposit)	Optional if ≤ 11 months; mandatory if > 11 months
Delhi	Rental Agreement (11 months)	₹50 fixed stamp paper	Not mandatory for 11 months
Karnataka	Leave & Licence	0.5% of annual rent + deposit	Mandatory if > 11 months
Tamil Nadu	Rental Agreement	1% of rent for each year of lease	Mandatory for > 12 months
Uttar Pradesh	Rental Agreement	2% of annual rent (max ₹200)	Mandatory if > 11 months
Gujarat	Leave & Licence	0.25% of annual rent + deposit	Recommended; mandatory if > 11 months

How to Register a Rent Agreement

Agreements for more than 11 months must be registered at the Sub-Registrar's office under the Registration Act, 1908. Both landlord and tenant (or their authorised representatives) must be present with original ID proofs, passport photos, and property documents. Registration fees are typically 1-2% of annual rent depending on the state.

ONLINE AVAILABLE

E-Stamp and Online Agreement (Maharashtra, Delhi, Karnataka)

Maharashtra: online registration via IGRMAHARASHTRA portal with Aadhaar-based biometric authentication at designated e-registration centres. Delhi: e-stamping through SHCIL (Stock Holding Corporation of India Ltd) authorised centres. Karnataka: Kaveri Online Services portal for e-stamping. Online agreements accepted as legally valid by courts when properly executed.

TDS on Rent — Section 194-IB

If monthly rent exceeds ₹50,000, the tenant (individual or HUF) must deduct TDS at 2% from rent under Section 194-IB. Key compliance steps:

Compliance Step	Requirement	Timeline
TAN requirement	Tenant must obtain TAN (Tax Deduction Account Number)	Before first deduction
TDS deduction	2% on monthly rent exceeding ₹50,000	Each month
TDS deposit	Deposit to government via Form 26QC (once a year or on vacating)	Within 30 days of end of financial year / vacating
TDS certificate	Issue Form 16C to landlord	Within 15 days of filing 26QC
GST on commercial rent	18% GST if landlord is GST-registered (commercial properties)	Monthly with rent payment

Legal note: The Transfer of Property Act, 1882 (Section 105) defines a lease. The Registration Act, 1908 (Section 17) mandates registration for leases exceeding one year. State-level Rent Control Acts (Maharashtra Rent Control Act 1999, Delhi Rent Act 1958, etc.) govern tenant protections and eviction procedures. Always consult the applicable state law.

Frequently Asked Questions

How much security deposit can a landlord legally ask for?

There is no national cap on security deposit in India. However, individual states have enacted limits: Karnataka caps it at 10 months' rent, Maharashtra at 3 months for residential properties, Tamil Nadu at 2-3 months under the Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act. In other states, it is typically negotiated and usually ranges from 2-6 months' rent. Always ensure the deposit amount, refund timeline, and conditions for deductions are clearly written in the agreement. The landlord must refund the deposit within the period stated in the agreement (commonly 30-60 days after vacating), after deducting any legitimate outstanding dues.

What is the notice period required to vacate a rented property?

The notice period is whatever is agreed upon in the rent agreement — typically 1 month for residential properties and 2-3 months for commercial properties. If the agreement is silent, Section 106 of the Transfer of Property Act applies: for a month-to-month tenancy, 15 days' notice is required by either party; for a year-to-year tenancy, 6 months' notice. It is always advisable to specify the notice period explicitly in the agreement. Notice should be in writing (email or registered post) to create a paper trail.

Is police verification mandatory for renting a property?

Police verification of tenants is mandatory in many states including Delhi (under Delhi Police Commissioner's Order), Maharashtra, Karnataka, and Uttar Pradesh. The landlord is responsible for initiating tenant verification with the local police station or through the respective state police portal (e.g., Delhi Police online verification, Maharashtra's Sarathi portal). Failure to do police verification can attract fines in some jurisdictions. In practice, it is highly recommended even where not legally mandated, as it protects the landlord and tenant both.

Is a verbal rent agreement legally valid in India?

A verbal rent agreement is technically enforceable under the Indian Contract Act, 1872 (if all contract elements are met), but it is extremely difficult to prove in court. For agreements up to 11 months, there is no mandatory registration requirement, but an unregistered written agreement still holds significantly more evidentiary value than a verbal one. From a practical standpoint, always insist on a written, signed, and witnessed agreement regardless of the duration. A verbal agreement provides no protection for either party in case of disputes over rent, deposit, notice period, or property condition.

What is the TDS rate if I pay rent to an NRI landlord?

If your landlord is an NRI (Non-Resident Indian), you must deduct TDS under Section 195 of the Income-tax Act — not Section 194-IB. The applicable TDS rate is 30% (plus applicable surcharge and cess) on the gross rent paid. This applies regardless of the monthly rent amount (no ₹50,000 threshold as in 194-IB for resident landlords). The tenant must obtain a TAN, deduct TDS on each rent payment, deposit it with the government, and file TDS returns. The NRI landlord can apply to the Assessing Officer for a lower withholding certificate under Section 197 if actual tax liability is less than 30%.

TDS on Rent GST on Rent HRA Exemption Income from House Property PAN Card

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