Rent Agreement in India: Stamp Duty, Registration and the Clauses That Actually Matter

A rent agreement is the most common legal document in the country and also one of the most casually drafted. Most people copy a template from a broker, fill in the names and the rent, and sign without reading the clauses that actually decide what happens when something goes wrong: a deposit dispute, an early exit, a landlord who wants the flat back for personal use.

This guide covers the parts that are genuinely state-specific and easy to get wrong: stamp duty, registration, and the difference between a lease and a leave and license agreement, which is not just terminology.

Lease deed or leave and license? The distinction has real consequences

A lease under the Transfer of Property Act, 1882 creates an interest in the property itself. A tenant under a registered lease has possessory rights that are harder to terminate and, in some states, come with rent control protections that make eviction slow even when the landlord is clearly in the right.

A leave and license agreement creates only a personal permission to occupy the property. It does not transfer any interest in the land, and it is revocable on the terms the agreement itself sets out. This is why almost every residential agreement in Maharashtra, Delhi, and most other states is drafted as leave and license rather than a lease, even though everyone colloquially calls it a rent agreement.

Stamp duty: a percentage of the whole tenancy, not just one month's rent

Stamp duty on a rent agreement is calculated on the total value of the tenancy, meaning the monthly rent multiplied by the number of months, plus the security deposit factored in at a notional rate (most states use 10% of the deposit per year as the taxable component, since the deposit itself is refundable and not real income). The exact formula and rate vary by state, and this is the single most common area where a rent agreement is under-stamped without either party realising it.

• Maharashtra: stamp duty on a leave and license agreement is 0.25% of the total rent plus deposit-equivalent for the full term, calculated on a slab basis for residential premises. Registration through the state's own Aaple Sarkar / registration portal is compulsory for any leave and license agreement, regardless of term length.
• Delhi: stamp duty is charged on the average annual rent, and registration is compulsory only where the term exceeds 11 months or the lease is for more than one year. This is a second, independent reason the 11-month pattern is so widespread in Delhi specifically.
• Karnataka: stamp duty on rental agreements is charged based on the average annual rent and the deposit; registration becomes compulsory once the term crosses 11 months.

The security deposit clause: put a number and a timeline on it

Security deposit amounts are set by market convention rather than a uniform national law: commonly one to two months' rent in Delhi and most of North India, and anywhere from three to ten months' rent in much of Karnataka and parts of Maharashtra, particularly Bengaluru. There is no cap in most states, which is exactly why the agreement itself has to do the work a statute doesn't.

The clause worth writing carefully is not the amount, it's the refund timeline. "The deposit shall be refunded" with no deadline is an invitation to a slow refund. State a specific number of days after the tenant vacates and hands back the keys, and state what it may be adjusted against: unpaid rent, unpaid utility bills, and damage beyond normal wear and tear, specifically excluding normal wear and tear itself.

Notice period and lock-in: two different clauses, often confused

A notice period clause says how much advance warning either side must give before ending the tenancy, typically one to three months. A lock-in period clause says the tenant cannot vacate at all, and the landlord cannot ask the tenant to leave, before a minimum term has passed, commonly six to twelve months, regardless of notice given.

These are often drafted as if they were the same thing, and they are not. A tenant who signs an agreement with a twelve-month lock-in and then needs to relocate for work at month four generally cannot simply serve notice and leave; the lock-in clause, if properly drafted, entitles the landlord to hold them to the remaining term or negotiate an exit. Read this clause specifically before signing if there's any chance your circumstances might change.

Maintenance, subletting and the personal-use exit

• Maintenance and repairs: state clearly who pays for what. The usual default is that the landlord covers structural repairs and the tenant covers day-to-day maintenance, but "usual" is not a legal standard, only what the agreement says is.
• Subletting: silence on this point does not mean subletting is allowed. Most agreements should explicitly prohibit it unless the landlord has genuinely agreed to permit it, because an unauthorised subtenant can complicate an eviction considerably.
• Landlord's right to re-enter for personal use: several state rent laws give a landlord a specific, faster eviction route if the property is genuinely needed for the landlord's own occupation. If this matters to you as a landlord, the agreement should track the specific language your state's law uses for this ground, not a generic phrase.

A rent receipt is a separate document, and matters for tax

A signed rent receipt each month is what a salaried tenant needs to claim House Rent Allowance exemption, and what a landlord needs as their own record of rent actually received. It is a short document, but it should carry the landlord's PAN if annual rent exceeds ₹1 lakh, since that is what income tax rules require for the tenant's HRA claim to be accepted without further verification.