How to Calculate Stamp Duty in Mumbai for Leave and License Agreement

When renting or leasing a property in Mumbai, it is mandatory to pay stamp duty as per the Maharashtra Stamp Act, 1958. Stamp duty is a form of tax levied by the government on legal documents, and leave and license agreements fall under this category. In this article, we will discuss how to calculate stamp duty in Mumbai for a leave and license agreement.

What is a Leave and License Agreement?

A leave and license agreement is a legal document that governs the relationship between a landlord and a tenant. It is a type of rental agreement that allows the tenant to use the property for a specified period, while the landlord retains ownership of the property. The agreement outlines the terms and conditions of the tenancy, such as the rent amount, security deposit, and duration of the lease.

Calculating Stamp Duty for a Leave and License Agreement

The stamp duty for a leave and license agreement in Mumbai is calculated based on the total rent payable during the period of the agreement. The stamp duty rate is determined by the state government and is subject to change periodically. As of June 2021, the stamp duty rate for a leave and license agreement in Mumbai is 0.25% of the total rent payable over the period of the agreement.

For example, if the monthly rent for a property is Rs. 30,000 and the duration of the leave and license agreement is 24 months, the total rent payable over the period of the agreement would be Rs. 7,20,000 (30,000 x 24). The stamp duty payable on this amount would be Rs. 1,800 (0.25% of 7,20,000).

In addition to stamp duty, it is also mandatory to pay registration fees, which are calculated at 1% of the total rent payable over the period of the agreement subject to a maximum of Rs. 30,000. In the above example, the registration fee would be Rs. 7,200 (1% of 7,20,000).

The stamp duty and registration fee can be paid online through the Maharashtra e-Registration portal or through authorized stamp vendors.

Conclusion

In conclusion, calculating stamp duty for a leave and license agreement in Mumbai is a straightforward process. It is calculated based on the total rent payable over the period of the agreement, and the stamp duty rate is subject to change periodically. It is important to pay stamp duty and registration fees on time to avoid any legal complications. By following these simple steps, you can ensure that you are compliant with the law and that your tenancy agreement is legally valid.