What is stamp duty on a rental agreement?
Stamp duty is a tax levied by the government on legal documents. This duty is also levied on the rent agreement, which is payable by the tenant. As these fees are set by the state government, stamp duty in Maharashtra is higher than in other states.
Why is stamp duty required?
In Maharashtra, registering the rental agreement is mandatory, regardless of the duration of the agreement. And for registering a document, it must be written on stamp paper.
Stamping a document makes it legally binding, and a legally binding agreement is proof of ownership or transfer. In a legal dispute, this registered agreement can be given in court as evidence.
Know more: 4 Things to consider while signing a rent agreement in Thane
How are stamp duty determined?
The stamp duty charges in Maharashtra are 0.25% of the total rent and security deposit.
Stamp duty calculator Maharashtra:
- A = Monthly rent x Time
- Advance rent + period/non-refundable deposit = B
- 10 percent x Refundable deposit x No of years of the agreement = C
- Total stamp duty = 0.25% x A+B+C
For example, A – Rs. 110,000 if the monthly rent is Rs. 10,000 whereas duration is 11 months. The advance rent – Rs. 10,000; B = 10,000. where C = 10% x 100000 x 1 = 10000.
A+ B+C = 110000 + 10000 + 10000 = 130000
Stamp Duty = 0.25% x 130000 = Rs. 325
Use this stamp duty calculator Maharashtra and find out your stamp duty charges.
What happens if you don’t pay stamp duty charges in Maharashtra?
Stamp duty is a one-time payment, and it has to be paid on time. Some people notarize their agreement to save on charges, but this is illegal.
If you fail to pay, you may face a fine and, in some cases, imprisonment. Hence, make sure to pay your stamp duty.
If you are looking to get a rent agreement in Maharashtra, contact Housewise.
Pryank Agrawal is the Founder and CEO of Housewise, a leading property management startup serving customers across 34 countries with operations in 13 Indian cities, including Pune, Bengaluru, Hyderabad, Chennai, Delhi NCR, and Mumbai. An engineering graduate from IIT Roorkee, Pryank brings extensive experience from the software industry. His passion for leveraging technology to solve real estate challenges led him to establish Housewise, simplifying property management for homeowners worldwide. After persistent requests from existing customers to address other challenges faced by Non-Resident Indians, he founded MostlyNRI, a dedicated portal assisting NRIs with services such as taxation in India, degree attestation, certificate procurement, RTO and banking-related requests, will and inheritance matters, and much more.
