Rental Agreement in India: Clauses, Stamp Duty, Registration, Rent Receipts, TDS and Tenant Rights
What to include in a rental agreement in India: key clauses, 11-month vs registered leases, stamp duty, security deposit, notice period, rent increase, TDS on rent, police verification and dispute tips.
A written rental agreement protects both landlord and tenant. It records what was agreed on rent, deposit, duration and rules, so that disputes can be settled with paper instead of memory. This guide explains what to include, how stamp duty and registration work and the tax points that affect both sides.
Fees, forms and procedures change often. Treat the figures here as indicative and confirm them on the official government or bank website before you act.
Leave and licence vs lease
In many states, residential rentals are written as a "leave and licence" agreement, where the licensee (tenant) gets the right to use the premises. A lease, which transfers an interest in the property, is usually for longer periods. The terms differ in law, stamp duty and tenant protections, so read what you are signing.
Why 11 months?
A lease of one year or more generally must be registered, which brings registration fees and higher stamp duty. Many agreements are therefore made for 11 months and renewed. This is common and legal, but an unregistered or short-term agreement may be weaker evidence in court and gives less protection to a tenant in some states. Check your state's rules, since some states require registration or online filing of all rental agreements.
Essential clauses
| Clause | What to specify |
|---|---|
| Parties and property | Full names, addresses and ID details of landlord and tenant, and a clear description of the property, with floor and unit |
| Term and renewal | Start and end dates, and how and when it will be renewed |
| Rent and escalation | Monthly rent, due date, mode of payment, and annual increase, such as 5% to 10% |
| Security deposit | Amount, purpose, and refund conditions and timeline. Often two to three months' rent, though it varies by city |
| Maintenance and utilities | Who pays society charges, property tax, electricity, water and repairs |
| Lock-in and notice period | Minimum stay and notice for termination, often one to three months |
| Use and sub-letting | Residential use only, no sub-letting without written consent |
| Entry and inspection | Right of the landlord to inspect with reasonable notice |
| Fixtures and inventory | List of furniture and appliances, and their condition |
| Termination and dispute resolution | Grounds for early termination and the process, including mediation or jurisdiction |
Stamp duty and registration
Stamp duty on rental agreements varies by state and by rent, deposit and duration. In some states, you pay a fixed amount on 11-month agreements, and in others a percentage of annual rent plus deposit. Registration may need both parties, witnesses and documents at the sub-registrar office, or through an online portal in some states. Verify the exact procedure with your state's registration department, and do not rely on a notarised plain-paper agreement for anything long term.
Security deposit and refunds
- Pay by bank transfer and get a receipt that clearly mentions it is a refundable deposit.
- Document the property's condition with dated photos at move-in and move-out.
- Specify what deductions are allowed, such as unpaid rent or damage beyond normal wear.
- State the refund period after vacating, typically 15 to 30 days.
Rent receipts and tax
- Tenants who claim HRA need rent receipts and, for annual rent above ₹1 lakh, the landlord's PAN. See the HRA guide and HRA calculator.
- Landlords must report rental income, with a 30% standard deduction on net annual value, and interest on a home loan within limits. See home loan tax benefits.
- Individuals paying monthly rent above ₹50,000 to a resident landlord must deduct TDS at the prescribed rate (currently 2%) under section 194-IB and deposit it, using Form 26QC and issuing Form 16C. Check current thresholds and rates.
- GST may apply to commercial rent above thresholds, and to some residential rentals when the tenant is a registered business, so check the current rule.
Police verification and compliance
Many cities require landlords to submit tenant details to the local police, and some require housing society approval. Provide ID and photographs, and cooperate with the process. It also protects the landlord and builds a record for the tenant.
Tips for tenants
- Read the whole agreement, and negotiate unfair clauses such as unlimited rent hikes or arbitrary eviction.
- Check the landlord's ownership documents and the society's rules.
- Pay rent by bank transfer and keep records.
- Compare renting with buying using the rent vs buy calculator and EMI vs rent.
Tips for landlords
- Screen tenants, verify ID and employment.
- Keep the property insured, and document all repairs.
- Follow due process, including written notice, for eviction. Self-help such as cutting utilities is illegal.
If there is a dispute
- Send a written notice stating the issue and a reasonable deadline.
- Try mediation or a legal notice through a lawyer.
- Approach the rent controller or civil court as applicable in your state.
Rental laws differ by state. See also the home buying checklist if you are weighing a purchase.
Frequently asked questions
Why are rental agreements usually for 11 months?
To avoid mandatory registration and higher stamp duty for leases of a year or more, though rules vary by state.
Is a notarised agreement valid?
It is evidence, but registration or stamp duty rules in your state may still apply.
How much security deposit is normal?
It varies by city, often two to three months' rent.
Do I need to deduct TDS on rent?
Individuals paying more than ₹50,000 a month to a resident landlord must deduct TDS under section 194-IB.
Can a landlord increase rent anytime?
Only as per the agreement and local rent laws.
What if the landlord does not return the deposit?
Send a written notice, then consider mediation or legal action.
Last reviewed 8 November 2026. Rates, limits and rules change, so confirm figures with the official source before you act.
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Information on AMTools is for general guidance and is not professional financial, tax, legal or medical advice. Rules, rates and limits change, so check the latest official source before acting.