If you are planning to rent a property in Maharashtra, you should be aware of the stamp duty and registration laws that apply to your lease agreement. Stamp duty is a tax levied by the government on certain documents that have legal or financial implications. Registration is the process of recording the details of the document in the official records of the government. Both stamp duty and registration are mandatory for lease agreements in Maharashtra, as per the provisions of Section 55 of the Maharashtra Rent Control Act, 1999. In this blog, we will explain the basics of stamp duty and registration, the types of lease agreements, the rates and methods of payment, and the benefits and consequences of complying or not complying with the laws.
What is stamp duty?
Stamp duty is a tax that is levied on certain documents that have legal or financial implications, such as sale deeds, gift deeds, lease agreements, mortgage deeds, etc. The purpose of stamp duty is to validate the document and prevent fraud and forgery. Stamp duty also acts as a source of revenue for the government.
The amount of stamp duty varies depending on the type, value, and duration of the document. The stamp duty rates are determined by the state government and are subject to change from time to time. The stamp duty rates for lease agreements in Maharashtra are given in Schedule I of the Maharashtra Stamp Act, 1958.
What is leave and licence agreement?
A leave and licence agreement is a type of lease agreement that grants the licensee (tenant) the right to occupy and use the licensor’s (landlord’s) property for a specified period of time, subject to certain terms and conditions. The licensee does not acquire any interest or ownership in the property and has to vacate the premises at the end of the term or on the termination of the agreement. The licensor retains the full control and possession of the property and can revoke the licence at any time.
A leave and licence agreement Is different from a lease agreement, where the lessee (tenant) acquires a transferable interest in the property and can sublet, assign, or transfer the lease to another person. The lessee also has the right to remain in possession of the property even after the expiry of the term, unless the lease is terminated by mutual consent or by due process of law. The lessor (landlord) cannot interfere with the lessee’s peaceful enjoyment of the property, except for reasonable repairs and maintenance.
A leave and licence agreement is preferred by most landlords and tenants in Maharashtra, as it offers more flexibility and security for both parties. It also attracts lower stamp duty and registration charges than a lease agreement.
Stamp Duty on lease agreement in Maharashtra
The stamp duty on lease agreement in Maharashtra depends on the type, value, and duration of the agreement. The stamp duty rates are given in Schedule I of the Maharashtra Stamp Act, 1958. Here are some of the key points to remember:
For leave and licence agreements, the stamp duty is **0.25%** of the total rent for the period of the agreement or **0.25%** of the market value of the property, whichever is higher. The market value of the property is determined by the Ready Reckoner Rates published by the government every year.
For lease agreements, the stamp duty is **0.5%** of the total rent for the period of the agreement or **0.5%** of the market value of the property, whichever is higher.
If the agreement includes a security deposit or advance rent, the stamp duty is calculated on the total amount of rent plus the deposit or advance. However, if the deposit or advance is refundable, the stamp duty is calculated only on the rent amount.
If the agreement includes any other charges, such as maintenance, parking, etc., the stamp duty is calculated on the total amount of rent plus the charges.
If the agreement is for a period of more than 60 months, the stamp duty is calculated on the rent for 60 months or the market value of the property, whichever is higher.
If the agreement is renewed or extended, the stamp duty is payable on the renewed or extended period of the agreement, subject to a minimum of Rs. 100.
If the agreement is amended or modified, the stamp duty is payable on the difference between the original and the amended or modified agreement, subject to a minimum of Rs. 100.
If the agreement is cancelled or terminated, the stamp duty is not refundable.
How to register for online lease agreement on IGR Maharashtra website?
The registration of lease agreement in Maharashtra is mandatory, as per the provisions of Section 55 of the Maharashtra Rent Control Act, 1999. The registration is the process of recording the details of the agreement in the official records of the government. The registration acts as a proof of the existence and validity of the agreement and protects the rights and interests of both the landlord and the tenant.
The registration of lease agreement in Maharashtra can be done online through the website of the Department of Registration and Stamps, Government of Maharashtra (https://igrmaharashtra.gov.in/). The online registration process is simple and convenient and can be done from anywhere and at any time. Here are the steps to register for online lease agreement on IGR Maharashtra website:
Visit the website of the Department of Registration and Stamps, Government of Maharashtra (https://igrmaharashtra.gov.in/).
Click on the option of “Online Services” and then select “e-Registration”.
Enter your mobile number and email id and verify them with the OTP sent to them.
Create your user id and password and log in to the portal.
Select the option of “Leave and Licence” or “Lease” depending on the type of your agreement.
Fill in the details of the agreement, such as the names and addresses of the parties, the property details, the rent amount, the deposit amount, the duration of the agreement, the terms and conditions, etc.
Upload the scanned copies of the documents required for the registration, such as the Aadhaar cards or PAN cards of the parties, the proof of ownership of the property, the photographs of the parties, etc.
Pay the stamp duty and registration fees online through the payment gateway provided on the portal. The stamp duty and registration fees can be paid by debit card, credit card, net banking, or UPI. The stamp duty and registration fees are calculated automatically based on the details of the agreement.
After the payment is successful, you will receive an acknowledgement receipt with a transaction id and a barcode.
Take a printout of the acknowledgement receipt and visit the nearest sub-registrar office along with the original documents and the parties to the agreement for verification and biometric authentication.
The sub-registrar will verify the documents and the parties and issue a registration certificate with a unique registration number.
You can download the registered lease agreement from the portal or collect a hard copy from the sub-registrar office.
Stamp duty in Maharashtra on lease agreement: How to pay?
The stamp duty on lease agreement in Maharashtra can be paid online through the website of the Department of Registration and Stamps, Government of Maharashtra (https://igrmaharashtra.gov.in/), as explained in the previous section. Alternatively, the stamp duty can also be paid offline through the following methods:
Non-judicial stamp paper: You can purchase non-judicial stamp paper of the required value from the authorized stamp vendors and write or print the lease agreement on it. The stamp paper should bear the date of purchase and the name of the purchaser. The stamp paper should be used within six months of the date of purchase and should not be tampered with or mutilated.
Franking: You can write or print the lease agreement on plain paper and get it franked with the required stamp duty from the authorized banks or franking agencies. The franking machine will imprint the stamp duty amount and the date of payment on the agreement. The franking should be done before the execution of the agreement and should not be erased or altered.
E-stamping: You can write or print the lease agreement on plain paper and get it e-stamped with the required stamp duty from the authorized service providers or collection centers. The e-stamping system will generate a unique identification number and a security code for the agreement. The e-stamping should be done before the execution of the agreement and should not be duplicated or forged.
Registration provisions for rental agreements
The registration provisions for rental agreements in Maharashtra are governed by the Registration Act, 1908, and the Maharashtra Rent Control Act, 1999. The registration provisions are as follows:
The registration of rental agreements in Maharashtra is compulsory, irrespective of the duration of the agreement. The registration should be done within four months of the execution of the agreement.
The registration of rental agreements in Maharashtra can be done online or offline, as explained in the previous sections. The online registration is preferred as it is faster, cheaper, and more convenient than the offline registration.
The registration of rental agreements in Maharashtra requires the payment of registration fees in addition to the stamp duty. The registration fees are 1% of the total rent for the period of the agreement or Rs. 1,000, whichever is less. The registration fees can be paid online or offline, as explained in the previous sections.
The registration of rental agreements in Maharashtra requires the submission of certain documents, such as the Aadhaar cards or PAN cards of the parties, the proof of ownership of the property, the photographs of the parties, etc. The documents should be self-attested and scanned for online registration or original and photocopies for
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