The stamp duty on a rental agreement is a tax that is paid to the government for the execution of the rental agreement. In general, stamp duty is a government tax that is paid to execute different kinds of contracts and agreements that involve a financial transaction or commitment. What the stamp duty does on a rental agreement, therefore, is form a legal relationship between the landlord and the landlord which will be binding for the period of the tenancy period. It gives legal validity to the rent agreement that the landlord and tenant have drawn up and want to be registered. The stamp duty is payable under section 3 of the Indian Stamp Act, 1899. It required to be paid by the time of registration of the contract, along with all the necessary costs and procedures needed to register a rent agreement.
Stamp duty is payable under Section 3 of the Indian Stamp Act, 1899. As stamp duty is a government charge that is levied on various property transactions, it is needed when renting a property or buying a property.
The stamp duty on rental agreements is paid by purchasing stamp paper. Purchasing stamp paper can be different depending on the state that you live in. Some states offer the e-stamping system where you can get it done online. Some states still continue the with the traditional impressed non-judicial stamp papers that need to be bought from stamp vendors. In some states, such as in Maharashtra, the stamp duty can be paid online through the government’s website. Franking is another way in which stamp duty can be paid. It involves given in an application at a bank or any other authorized agency with the document that requires stamp duty to be paid. The agency then puts a stamp on it proving that the required stamp duty has been paid.
Each state will levy the stamp duty tax differently as stamp duty is a state subject and there are various elements that influence the stamp duty rates. These elements may include the buyer’s gender, age of the buyer, and purpose. One factor that heavily decides the amount of stamp duty that needs to be paid is the location of the property. In the case of rent contracts for 11 months or less, stamp paper of Rs. 100 or Rs. 200 can be used. However, every rent agreement needs to be registered if the rent tenure is greater than 11 months. Here’s a summary of how different states and cities in India levy stamp duty tax.
