To facilitate the registration of rental agreements, the stamp and registration department will provide substantial concessions on stamp charges for lease agreements lasting up to 10 years. The cabinet approved the proposal on Friday.
Presently, despite the existence of a registration provision, very few landlords and tenants opt to register agreements due to the high costs involved. An unregistered agreement lacks legal validity under the UP Regulation of Urban Premises Tenancy Act, making it susceptible to disputes.
Finance Minister Suresh Khanna stated that while current regulations mandate the registration of tenancy deeds exceeding one year, the majority of agreements are either verbal or, if documented, remain unregistered. “Such instances typically come to light during audits conducted by departments such as GST and electricity, resulting in recovery actions for unpaid stamp duty.
It is also essential to pay the appropriate stamp duty on lease deeds, irrespective of their registration status,” he remarked. Minister for Stamp and Registration Ravindra Jaiswal noted that elevated stamp duty often deters individuals from drafting and registering lease deeds, prompting the department to offer extensive exemptions. “With this new system, the maximum stamp duty and registration fee for tenancy deeds will not surpass the established limits.
Furthermore, a cap of Rs 10 lakh has been instituted for calculating average annual rent. To avert revenue loss, leases related to tolls and mining have been excluded from this exemption,” the minister explained.
According to the new regulations, the maximum stamp duty and registration fee applicable across various categories, determined by tenancy duration and average annual rent, has been explicitly outlined. This decision will directly benefit the public by alleviating the financial burden of stamp duty and streamlining the registration process.
