Why Rent Agreement Is Only For 11 Months

Case I: Stamp duty in Delhi, for example, is 2% of the average annual rent, plus the amount of the guarantee. In case the monthly rent of Rs 10,000. The annual rent would be Rs 1.20,000. As a result, the stamp duty is 2% of Rs 1.20,000, or 2,400 Rs, plus Rs 100 for the security deposit which makes the total amount of the Rs 2,500. To avoid these fees, many landlords and tenants mutually agree not to register the agreements. If you want to register a rental agreement, tenants and landlords can agree to share their costs. In order to avoid these juicy fees, tenants and landlords agree not to register the contract. As a result, most leases are signed for an 11-month period. In addition, the establishment of an 11-month lease gives the lessor flexibility in determining rent as the dominant market scenario. In the second case, the rent for the first year is 10,000 aff. per month. The rent for the second year is paid to the tune of 11,000 aff. per month.

Finally, the rent for the third and final year is paid to the tune of 12,100 aff. The average of the three years` rent will be the average year`s rent. The average annual rent is therefore 12,100 X 12 Rs. Stamp duty is therefore calculated with a rate of 2% to 1.45,200 Rs, which corresponds to 2,904 Rs plus 100 others for security, bringing the total to 3,004 Rs. Most leases are signed for 11 months so they can avoid stamp duty and other fees. Under the Registration Act of 1908, registration of a lease is mandatory if the tenancy period is more than 12 months. If an agreement is registered, stamp duty and registration tax must be paid. For example, in Delhi, for a lease of up to five years, stamp paper costs 2% of the total annual rent of one year. Add a flat fee of Rs100 if a security deposit is part of the agreement. For a lease of more than 5 years but less than 10 years, it represents 3% of the value of the average annual rent for a year. For 10 years and more, but less than 20 years, it is 6% of the value of the average annual rent of a year.

The stamp paper may be in the name of the tenant or landlord.