Why the Rental Agreement Stamp Paper Should be Registered

Rental agreements are important for harmonious landlord-tenant relationships, safeguarding the rights of both parties. One of the top advantages of GST registration for a rent agreement with the stamp duty being paid is that it acts as legal proof, safeguarding the landlord in case of any legal issues. There is no requirement for registration or any stamp duty for an 11-month rent agreement. But if the rental term exceeds 11 months, the registration and payment of the stamp duty on rental agreement registration should be done by the owner or tenant or both.

How to Prepare and Register a Rent Agreement

Getting the rental agreement registered is the responsibility of the landlord. It can be done by visiting the nearest sub-registrar office. According to the Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act 2017, a rent agreement must be registered within 90 days of its execution, in the presence of both parties and minimum two witnesses. If either party is unavailable, the registration can be executed by someone who holds the power of attorney for the unavailable party for finalising the agreement. Here are the steps for preparing and registering a rent agreement:

• Mutual consent of the landlord and tenant to the terms and conditions of the rental deal must be obtained. The terms and conditions should include all important information about the transaction, including security deposit, rent charges, maintenance charges, rental term, notice period, etc.
• Print the mutually agreed rent terms on a stamp paper of the applicable value. Both parties should read the points again to avoid discrepancies.
• The agreement should be signed by both parties in the presence of two or more witnesses.
• The agreement should the registered at the office of the local sub-registrar.

Stamp Duty Charges for Rent Agreement Registration

It is important to understand what stamp duty is for rent agreement registrations. It is a charge imposed by the government, levied on different types of property transactions. Apart from stamp duty on rental agreement registration, you are also required to pay stamp duty when you invest in a plot for sale in Chennai.

Who Should Purchase the Rental Agreement Stamp Paper?

Either the tenant or landlord can purchase the rental agreement stamp paper. The original stamp paper will continue to belong to the purchaser, while the other party can get a scanned version or photocopy of the agreement stamp paper. In India, the cost of preparing the rent agreement and the stamp duty is generally paid by the tenant as they are responsible for rent agreement registration under local laws but can also be shared by the tenant and landlord.

How to Determine Rental Agreement Stam Paper Value?

There is no mandatory 11-month rental agreement stamp paper value. Apart from this, there are several factors that are taken into account for determining the stamp paper value for a rental agreement. The stamp duty for an 11-month rent agreement also varies based on similar factors. These factors include:

• The location of the property.
• Whether it is residential or commercial property.
• The rent agreement time frame.
• Whether it is a short-term lease or long-term lease.
• Annual rent of the property.

What Is the 11-Month Rental Agreement Stamp Paper Value?

Stamp paper value generally ranges from Rs 50 to Rs 1000. There is no mandatory requirement for registering a 11-month rent agreement. However, if you opt to get it registration, the stamp paper value for creating an 11-month rent agreement is typically Rs 100.

Stamp Duty on Rental Agreement Registration: Calculation and Charges in Tamil Nadu

The stamp duty charges on a property usually fall somewhere between 5% to 7% of the property’s market value, along with a 1% registration charge. The market value of the property when it was purchased, the type of property, number of floors, size and age of the property, location and area, and the owner’s profile are all taken into consideration for calculating the stamp duty on rent agreements. You can also use an online rent agreement stamp duty calculator to compute the applicable stamp duty charges. In Chennai, the stamp duty charges are as follows:

• Short-Term Rent Agreement of Less than 11 Months: Usually calculated as 0.25% of the total rent for the total rental term.
• Long-Term Rent Agreement of More Than 11 Months: Stamp duty is determined at 1% of the rent for the total rental term.

How to Pay Stamp Duty on Rental Agreement Registration

• Rental Agreement e-Stamp Registration

  Tamil Nadu offers an e-stamping facility through the Stock Holding Corporation of India Limited. You can complete the application form on the SHCIL website and submit it at an authorised collection centre, along with the payment for the rental agreement e-stamp certificate. The stamp duty for the rental agreement e-stamp remains the same as in other methods.

• Online Registration

  Several states allow you to pay the stamp duty on rental agreement registration online through their official government website.

• Offline Registration

  Some states also follow the traditional method, where you can make the payment through impressed non-judicial stamp papers that are purchased from stamp vendors.

• Franking

  Under this method, you submit an application at an authorised agency with the required documentation.

In order to avoid any tenant-landlord disputes or legal predicaments in the future, it is critical to a rent agreement prepared and registered.