Laws for rental properties in Maharashtra – Stamp duty
Wednesday, 3 October 2018

When letting out a property, there are several legal formalities that one needs to fulfil. It is important to stamp and register the agreements for leave and licence. All states have different rates and laws dealing with stamp duty. In the state of Maharashtra, stamp duty and registration of leave and licence transactions is also different.

    Stamp Duty provisions:

Stamp duty is a government tax, which is levied on all legal property transactions. Besides lending legality to a document, Stamp Duty also boosts revenue for local government. Stamp papers, that are bought either in the name of the seller or buyer is valid for 6 months, provided the stamp duty is paid without any delay.

Stamp duty rates differ in various states across the country. The buyer has to pay a stamp duty at the time of registration. The central government of India decides the registration and stamp duty charges. Any delayed payments will have 2% as a penalty every month. The stamp duty charges also differ if a property is old or new.

The stamp duty and registration charges in Pune is one of the biggest revenue sources for Maharashtra. The basic framework of stamp duty is laid down in the Indian Stamp Act, 1899, which authorises the states to modify the same, as per their needs. Accordingly, the government of Maharashtra passed the Bombay Stamp Act, 1958. According to that, leave and licence agreements are required to be stamped with a rate of 0.25 per cent of the total rent for the period. The rate of stamp duty for leave and licence agreements is the same for residential and commercial developments.

As per the latest updates by the Maharashtra Government in 2018, the stamp rate in Pune is 6% for females, males and male-female as joint owners.

    Registration provisions:

As per Section 17 of the Indian Registration Act, which applies to the whole of India, every agreement for leases of immovable property from year to year, or for any term exceeding one year, are required to be registered mandatorily.

As per the provisions of Section 55 of the Maharashtra Rent Control Act, 1999, every agreement of a tenancy or leave and license has to be in writing. The same also needs to be mandatorily registered, regardless of the period of tenancy. The registration fee for a tenancy agreement in Maharashtra, depends on where the property being let out, is located. The registration fees are Rs 1,000, if the property is situated under any municipal corporation area and it is Rs 500, if the same is in a rural area. In the absence of any agreement to the contrary, the cost of stamp duty and registration is to be borne by the tenant.

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