Stamp duty and registration laws for rentals in Maharashtra

Stamp duty and registration laws for rentals in Maharashtra

There are a number of laws and legal formalities one needs to go through when subletting a property or taking it for a rent and therefore stamp duty and registration is one such part of the transactions. It is done as per the law. Therefore we will discuss all the stamp duty and registration laws for rentals in the state of Maharashtra.

Provisions as per Stamp duty

The basic framework is all laid out in the Indian stamp Act 1899, which basically authorizes all the states to modify the act as per their needs. Accordingly the state of Maharashtra has the Bombay Stamp Act 1958. The payment of the stamp duty on leaves and license agreements is all covered under Article 36A of the Bombay Stamp Act, 1958. It is mandate that there is a stamp on Leave and license agreements with a flat stamp duty rate of 0.25 per cent of the total rent for the period.

Furthermore, the rate of the stamp duty for leave and license agreements is the same for residential and commercial premises. The execution of leave and license agreement can be for a period not greater than 60 months.

There is a formula to calculate the stamp duty charges as per the law which is payable on the rental agreement:

Rental (Per Month) x Total No. of M>

Advance rent (if any) paid for the period / Non-Refundable Deposit = B

10 % of Refundable Deposit x No. of the years the agreement is signed for = C

Total Amount which is subject to Stamp Duty (D) = A+B+C

Stamp Duty (E) = 0.25% x D

How to do registrations provisions for rental agreements:

As per Section 17, Indian Registration Act, it applies to all the states of India. It applies to every agreement for leases of immovable property from year to year. Or Mandate registration for any term exceeding one year unless, the state laws provide otherwise. Each and every leave and license agreement for a period of 12 months or more needs to be registered.

Although for the state of Maharashtra the laws are made more rigid. As per the provision of Section 55 of Maharashtra Rent control Act, 1999. Every agreement of the tenancy for no matter what period of time needs to be in writing and also needs to be registered.

Moreover, the registration fee for the tenancy agreement in Maharashtra would depend on location of the property being let out. The registration fees are Rs. 1,000, if the property is situated under a municipal corporation area and it is Rs. 500, if it is in a rural area. In the absence of any agreement to the contrary, the cost of stamp duty and registration is to be taken care of by the tenant itself.

 Documents required for the Stamp Duty and registration:

1. Basic Documents are required of Tenant, Landlord and the witnesses such as Identity proof, residential proof.

2. The property documents or tax receipt of the property being let out.

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