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When you are renting out a property in Delhi, paying Stamp duty is essential part of the process to make it legally valid and enforceable. Stamp duty is a tax charged by the government on legal documents to make them legally valid such as rent agreement, Affidavit or lease deed.
Is stamp duty compulsory on rent agreements?
Yes. Every Rent agreement in Delhi must be executed on A e Stamp Paper. A Rent Agreement without stamp paper or inadequately stamped agreement may not be accepted as valid evidence in court in case of any disputes between landlord and tenant.
Stamp Duty for 11-Month Rent Agreements
Most of the residential rent agreements in Delhi are made for 11 months and these doesn’t require registration. Notarization is enough for 11 month rent agreement. For these rent agreements, parties usually use ₹100 e stamp paper that depends on terms like rent amount and security deposit. Although, registration is not mandatory but proper drafting on e Stamp paper is still important in Delhi.
Stamp Duty for Long-Term / Registered Lease
If the lease period is more than 11 months, registration becomes mandatory. In such cases
- Stamp duty is usually calculated as a percentage of the average annual rent (sometime with security deposit).
- Separate registration charges are also payable at the Sub-Registrar office.
(Exact percentage of may vary depending on the tenure and nature of the lease as per the Delhi Stamp Act.)
How to pay Stamp Duty in Delhi for Rent Agreement?
Delhi government offers e-Stamping which is fast and legally valid. You can buy e Stamp paper from authorized stamp vendor or online portals.
You can also pay the Stamp duty by getting your Rent Agreement Delhi from eDrafter. Just fill the form to provide us details and pay the amount and we will draft your rent agreement along with paying the Stamp Duty on your behalf.
Why is Stamp Duty Important?
There are various reasons you must pay the Stamp Duty while drafting Rent Agreement in Delhi. Here are some of the major reasons:
- It makes Rent Agreement legally valid and enforceable.
- It prevents legal disputes between both parties.
- Helpful evidence for police verification, address proof, and court proceedings.
- Ensure transparency between Landlord and Tenants.
Conclusion
Always ensure you pay the stamp duty properly and whenever required get the rent agreement registered by paying correctly calculated stamp duty as per Delhi Stamp Act. For calculation, you should consult a legal expert or refer to the latest Delhi Government notification.