How Stamp Duty on a Leave and Licence Agreement Is Calculated in Maharashtra

Stamp duty on a Mumbai rental is 0.25% of total rent plus a notional 10% yearly interest on the deposit. A worked example, the registration fee, and who usually pays.

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Owners often ask why the stamp duty on two similar rentals is different. The answer is usually the deposit. In Maharashtra, stamp duty on a leave and licence agreement is worked out on the rent and on a notional interest on the refundable deposit.

The formula

A = monthly rent × number of months
B = any non-refundable deposit or advance rent
C = 10% × refundable deposit × number of years
Stamp duty = 0.25% × (A + B + C)

A bigger deposit raises the stamp duty, because the law treats 10% a year of it as rent.

A worked example

Rent Rs 25,000 a month for 24 months, with a refundable deposit of Rs 5 lakh:

Rent: Rs 25,000 × 24 = Rs 6,00,000
Notional interest: 10% × Rs 5,00,000 × 2 = Rs 1,00,000
Total: Rs 7,00,000
Stamp duty at 0.25% = Rs 1,750

Registration fee

On top of stamp duty, the registration fee is Rs 1,000 in a municipal corporation area such as Mumbai, and Rs 500 in rural areas.

Who pays?

Whatever the agreement says. In Mumbai it is common for the tenant to pay, but it is negotiable.

Why registration matters

Section 55 of the Maharashtra Rent Control Act makes the landlord responsible for registering the agreement. Failing to do so can attract imprisonment of up to three months, a fine of up to Rs 5,000, or both.
If an unregistered agreement ends up in a dispute, the tenant's version of the terms can prevail unless proved otherwise.

Mumbai has online leave and licence registration, with Aadhaar-based e-signing. Read our leave and licence guide.

Frequently asked questions

How is stamp duty calculated on a rent agreement in Maharashtra?

0.25% of the total rent for the term plus any non-refundable deposit, plus 10% a year of the refundable deposit treated as notional rent.

What is the registration fee for a leave and licence agreement in Mumbai?

Rs 1,000 in a municipal corporation area, in addition to stamp duty.

Sources

This is general information, not legal or tax advice. Rules change, so check your own case with a lawyer or CA.

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