Quick answerA rent agreement records the terms on which a landlord lets property to a tenant. Under section 17 of the Registration Act, 1908 and section 107 of the Transfer of Property Act, a lease for more than one year, from year to year or reserving a yearly rent must be registered, while shorter agreements need not be. That is why many residential agreements are made for 11 months, often as leave and licence agreements. Every agreement must carry stamp duty at the rate fixed by the state, and most cities require police verification of tenants.
- Laws
- Registration Act 1908, TP Act 1882, state rent law
- Registration
- Compulsory for leases over one year
- Stamp duty
- Set by each state
- Model law
- Model Tenancy Act 2021, adopted by few states
Lease or leave and licence?
A lease under section 105 of the Transfer of Property Act transfers a right to enjoy the property for a period, and the tenant gets an interest in it. A leave and licence under section 52 of the Indian Easements Act, 1882 only gives permission to use the premises, without creating an interest in the property. Landlords often prefer licences because a licensee's claims are narrower.
The label alone does not decide the question. Courts look at the substance: exclusive possession, the intention of the parties and the terms as a whole. A document called a leave and licence that in substance grants a lease will be treated as a lease, including for rent control protection where that law applies.
Registration and stamp duty
| Agreement | Registration | Stamp duty |
|---|
| Up to 11 months (or not exceeding one year) | Not compulsory under the Registration Act in most states | Payable at the state rate, usually lower for short terms |
| More than one year, year to year, or yearly rent | Compulsory under section 17(1)(d) of the Registration Act | Higher rate, usually based on average annual rent, term, deposit and premium |
| Leave and licence in Maharashtra | Compulsory for all durations under the Maharashtra Rent Control Act | As per Maharashtra stamp law |
Stamp duty is charged under the Indian Stamp Act, 1899 as adopted and amended by each state, and is paid through e-stamp paper or the state's online system. Because rates and slabs change, we calculate the duty for the state and term when we draft. An unstamped agreement cannot be admitted in evidence until duty and penalty are paid, and an unregistered lease that required registration cannot ordinarily be used to prove the lease terms (section 49 of the Registration Act), though it can be used for limited collateral purposes. In disputes, these defects mostly hurt the party who needs to rely on the document.
Clauses every rent agreement should have
- Parties and property: full names, addresses and an exact description of the premises, with fittings and fixtures listed in an annexure.
- Term, lock-in and renewal: start date, duration, any lock-in period and how renewal works.
- Rent and escalation: monthly amount, due date, mode of payment and agreed annual increase.
- Security deposit: amount, conditions for deductions and the time for refund after handover.
- Charges: who pays electricity, water, maintenance, property tax and society charges.
- Use and sub-letting: residential or commercial use only, with a bar on sub-letting without consent.
- Repairs: structural repairs by the landlord, day-to-day repairs by the tenant.
- Termination and notice: notice period for each side, consequences of default and handover condition.
- Dispute resolution: jurisdiction and, for commercial leases, an arbitration clause.
For commercial premises, also cover GST on rent where applicable, signage, fit-out, permitted hours, insurance and assignment. Our contract lawyers prepare longer commercial leases, and for a shop or office you may also need a trade licence at the new premises.
Tenant police verification
Most districts and commissionerates require landlords to give tenant details to the local police, through orders issued under section 163 of the Bharatiya Nagarik Suraksha Sanhita (old section 144 CrPC) or local rules. Verification is usually done online through the state police citizen portal or at the police station, with the tenant's photograph and ID. Failure to verify can lead to prosecution for disobeying the order. The requirement and process vary by city, so we include verification in our checklist for every agreement.
Rent control and the Model Tenancy Act, 2021
Tenancy is a state subject. Older rent control laws, such as the East Punjab Urban Rent Restriction Act, 1949 which applies in Punjab and Chandigarh, protect tenants of covered premises and allow eviction only on specified grounds, such as non-payment, sub-letting, damage or the landlord's bona fide need, through the Rent Controller.
The Central Government approved the Model Tenancy Act, 2021 for states to adopt. It proposes a Rent Authority where every tenancy is reported, caps the security deposit at two months' rent for residential premises and six months for non-residential, and provides fast-track Rent Courts and Tribunals. It is not law by itself; only a few states, such as Uttar Pradesh and Tamil Nadu, have enacted tenancy laws on similar lines, so the law of your state must be checked.
Tax points landlords and tenants miss
- TDS on rent: individuals and HUFs paying rent above ₹50,000 a month must deduct tax at source (formerly section 194-IB, now renumbered under the Income-tax Act, 2025), and businesses deducting tax on rent have separate obligations. Missed deductions lead to interest and penalty for the tenant.
- GST: renting commercial property is a taxable supply, so a GST-registered landlord charges GST on commercial rent. Residential premises let to a GST-registered business can attract GST under reverse charge. The agreement should say whether rent is inclusive or exclusive of GST.
- HRA: salaried tenants claiming house rent allowance need rent receipts and, above a threshold, the landlord's PAN.
- Rental income: the landlord must declare rent in the income tax return.
Deposits, eviction and disputes
The most common disputes are refund of the security deposit, unpaid rent and a tenant who will not vacate. Where rent control law does not apply, a landlord ends a monthly tenancy by notice under section 106 of the Transfer of Property Act and then files a suit for possession and arrears if the tenant stays on. Where rent control applies, eviction is only on the grounds that law permits. Changing locks or cutting electricity or water to force a tenant out is unlawful.
A tenant whose deposit is withheld without reason can send a legal notice and file a civil suit for recovery. A properly drafted agreement with an inventory and handover clause usually avoids both problems.
Documents you need
For a standard residential agreement we need the following. Commercial leases may need more.
- Landlord's ID and address proof (Aadhaar, PAN)
- Tenant's ID and address proof, and company documents if the tenant is a company
- Proof of the landlord's ownership: sale deed, allotment letter or latest property tax receipt
- Address and description of the premises
- Agreed rent, deposit, term, lock-in and escalation
- Passport-size photographs of both parties
- Details of two witnesses
How we handle it for you
Take your terms
We note the agreed rent, deposit, term and any special conditions.
Draft the agreement
We prepare a balanced draft suited to residential or commercial use and the law of your state.
Stamp duty
We calculate the duty and arrange e-stamp paper or online payment.
Sign and register
We arrange signing and, where required or chosen, registration at the sub-registrar office.
Verification
We guide the landlord through tenant police verification and handover documentation.
Why clients choose ProudLegal
Advocates who appear in courtYour matter is drafted and argued by enrolled advocates, not call-centre staff.
Company and tax filings in-houseCompany secretaries and tax professionals handle registrations and returns.
Fees agreed in writingYou receive a written fee quote before any work begins.
Updates on WhatsApp and emailEvery hearing date, filing and document is shared as it happens.
Please note: this page explains the law and procedure in general terms as on 30 October 2026. Fees, limits and timelines change, and the facts of each case matter, so take advice on your own papers before acting.
Frequently asked questions
Why are most rent agreements made for 11 months?
Leases for more than one year must be registered under the Registration Act, which involves higher stamp duty and a visit to the sub-registrar. An 11-month agreement avoids compulsory registration in most states.
Is an unregistered rent agreement valid?
An agreement for up to one year need not be registered in most states. A lease for more than one year that is not registered cannot ordinarily be used to prove its terms in court.
How much stamp duty is payable on a rent agreement?
It depends on the state, the term, the rent and the deposit. We calculate it for your state when drafting.
Is police verification of tenants compulsory?
In most cities it is required by police or district orders, and the landlord can be prosecuted for not complying.
How much security deposit can a landlord take?
Unless your state has adopted a law like the Model Tenancy Act, which caps it at two months for homes, the deposit is whatever the parties agree.
Can a landlord evict a tenant without going to court?
No. The landlord must give proper notice and, if the tenant does not leave, obtain an order from the Rent Controller or civil court.
Has the Model Tenancy Act been applied everywhere?
No. It is a model law for states to adopt, and only a few states have enacted laws on similar lines.
Can a rent agreement be made online?
Drafting and e-stamping can be done online in most states. Registration of longer leases may need a visit to the sub-registrar, though some states allow online registration.
