The stamp duty applicable on the rent agreement is as mentioned below:

1. For 11 months: 2% of Average Annual Rent.
2. For less than a five-year rental period: 2% of Avg Annual Rent.
3. For five to less than 10-year rental period: 3% of Avg Annual Rent.
4. For 10 to 20-year rental period: 6% of Avg Annual rent.

Apart from stamp duty, Rs 1,100 is payable towards registration charges.

1. Looking at multiple options and choosing the right one.
2. Meeting the owners to discuss all terms and conditions along with title and legalities and finalising the terms of the deal.
3. Reading/updating & approving the lease draft as provided by the owner.
4. Handing over the security deposit and advance rent cheques to the owner.
5. Buying Stamp Papers and going to the sub registrar office for registration.
6. Taking possession on the day of registration or as decided mutually.

Residential premises
Commercial Premises
Mixed Land use premises
Industrial Premises
Educational Plot
Hospital Plot

It is always advisable to keep your place of work on a lease/rent basis and keep all that money you have saved to buy properties that can fetch you good returns elsewhere.

A major advantage to take a place of work or billing on lease is that the rent counts as an expense out of your profits. Another Big advantage is that if it doesn’t suit your work, then at least you can vacate it after the lock-in period and look for a more suitable premises, whereas if you buy a property, it will not be that easy to dispose it off as quickly.

It is often a practice among people to create rental agreements on Stamp paper of minimum values like Rs.20/- or 50/- or 100/- etc. This is to save money on paying the actual Stamp Duty charges prescribed by the Government. The difference in the Government charges and the minimum charges is usually very small. As long as there is no legal dispute between the owner and the tenant things go well. Now let us see an example:

Kumar is the owner of a 2 bedroom house. He lets it out on monthly rent of Rs. 8000/- to Mahesh for a period of 12 months. The security deposit  is Rs.24000/-.They make a rental agreement on a 50 rupees Stamp paper. Things go well till 5 months. Mahesh pays rent till 5 months after which he stops paying the rent and also refuses to move out. Ashok immediately approaches the Court. The Court impounds the agreement for deficit Stamp Duty paid and imposes the fine of up to 10 times the Stamp Duty to be paid. So what will be the penalty Ashok has to pay? Let us calculate.

8000×12 = 96000 x 2% = Rs. 1920 + 100 =  Rs.1920 x 10 = Rs.19200/-

Hence Ashok will have to pay Rs. 19200/- to the Court as fine for non payment of Stamp Duty.

But if Ashok has initially made the agreement by paying the proper Stamp Duty he would have had to pay only Rs. 1920/- Hence it is always recommended that you pay the appropriate Stamp Duty and be relaxed.