Are you planning to rent out your property in Delhi or looking to enter into a leave and license agreement as a tenant? It is important to understand the Stamp Duty implications related to such agreements.

A leave and license agreement is a legal contract between the licensor (property owner) and licensee (tenant) which allows the latter to use the property for a specific period of time. This agreement is usually signed for residential or commercial purposes and acts as an alternative to a rental agreement.

Stamp Duty is essentially a tax levied on the legal recognition of a document. It is mandatory to pay Stamp Duty in Delhi for every leave and license agreement that is executed. The amount of Stamp Duty payable may vary based on certain factors such as the type of property, the rental value, the duration of the agreement, etc.

In accordance with the Indian Stamp Act, 1899, the Stamp Duty for leave and license agreements in Delhi is 2% of the annual rent for properties with a lease period of up to five years. For agreements with a lease period of more than 5 years, the Stamp Duty rate is 2% of the average annual rent of the entire lease period.

It is important to note that Stamp Duty needs to be paid within the first month of the agreement`s execution. Failure to pay the Stamp Duty may result in legal implications such as fines, penalties, and even imprisonment.

To execute a leave and license agreement in Delhi, one needs to get the agreement drafted by a legal expert and register it with the Sub-Registrar’s office of the area where the property is located. Once the agreement is registered, the Stamp Duty needs to be paid.

In a nutshell, Stamp Duty is a necessary and mandatory aspect of executing a leave and license agreement in Delhi. It is important to understand the applicable rates and comply with the payment obligations to avoid any legal complications. To ensure a smooth and hassle-free process, it is recommended to seek legal guidance and assistance.