What is the stamp duty on a rental agreement?

Stamp duty on a rental agreement is a state-levied tax on the legal document formalizing a tenancy. The amount varies significantly by state, agreement tenure, and monthly rent amount. Paying the correct stamp duty is a prerequisite for registering or legally enforcing the agreement.

How Stamp Duty is Calculated (General Formula)

• Based on total rent payable over the agreement tenure.
• Security deposit amount may also be included in the calculation.
• Rate varies: typically 0.1% to 2% of the total rent or lease value.

State-Wise Examples

• Maharashtra: Stamp duty = 0.25% of total rent + deposit for agreements up to 5 years.
• Delhi: 2% of average annual rent for up to 5 years; 3% for 5–10 years.
• Karnataka: Rs 20 stamp paper for agreements up to 11 months; higher for longer tenures.

Who Pays Stamp Duty

Stamp duty is typically the tenant's responsibility, though it can be shared as agreed. Non-payment renders the agreement inadmissible in court a common pitfall for unregistered agreements on unstamped paper.

Stamp duty may seem like a small cost, but unpaid or underpaid stamp duty can invalidate your rental agreement in a legal dispute. Always check the latest state-specific rates before executing a rental agreement, and ensure payment through authorised stamp vendors or e-stamping portals.