Stamp Duty in Mumbai for Leave and Licence Agreement: All You Need to Know
If you are planning to rent out a property in Mumbai, entering into a leave and licence agreement is a must. And with any legal agreement comes the obligation of paying stamp duty. In this article, we’ll discuss everything you need to know about stamp duty in Mumbai for leave and licence agreement.
What is Stamp Duty?
Stamp duty is a tax levied by the government on legal documents to make them legally valid. In the case of leave and licence agreements, it is a form of tax paid by the tenant to the state government. It is calculated based on the total value of the agreement, which includes the basic rent, a security deposit, and any other charges that may be applicable.
Who Pays the Stamp Duty for a Leave and Licence Agreement?
As per the Maharashtra Rent Control Act, 1999, it is the responsibility of the tenant to pay the stamp duty for a leave and licence agreement. The payment of stamp duty needs to be done within 30 days from the date of signing the agreement. In case of delay, the tenant may face a penalty of 2% per month on the amount of stamp duty levied.
What is the Rate of Stamp Duty for a Leave and Licence Agreement in Mumbai?
The rate of stamp duty in Mumbai for a leave and licence agreement is determined by the Maharashtra government and is subject to change. Currently, the stamp duty rate for a leave and licence agreement in Mumbai is 0.25% of the total amount payable. This includes the basic rent, security deposit, and any other charges that may be applicable.
How to Calculate Stamp Duty for a Leave and Licence Agreement in Mumbai?
To calculate the stamp duty payable for a leave and licence agreement in Mumbai, you need to follow the steps below:
Step 1: Calculate the total amount payable under the agreement. This includes the basic rent, security deposit, and any other charges that may be applicable.
Step 2: Determine the duration of the agreement, i.e. the number of months for which the agreement is being entered into.
Step 3: To calculate the stamp duty, multiply the total amount payable under the agreement by the number of months and then multiply it by 0.25%.
For example, if the monthly rent is Rs. 20,000, and the security deposit is Rs. 1 lakh, and the agreement is for 24 months, the stamp duty payable would be:
Total amount payable under the agreement = (20,000 x 24) + 1,00,000 = Rs. 5,80,000
Stamp duty payable = 5,80,000 x 0.25% = Rs. 1,450
Conclusion
In Mumbai, stamp duty is an essential aspect of a leave and licence agreement. As a tenant, it is your responsibility to pay the stamp duty within 30 days of signing the agreement to avoid any legal troubles or penalties. By understanding the rate and calculation of the stamp duty, you can ensure a smooth and hassle-free renting experience.
