Lease Deed Registration

A Lease Deed is a legal contract under Sections 105 to 117 of the Transfer of Property Act, 1882 that grants the lessee (tenant) the right to use and enjoy immovable property belonging to the lessor (landlord) for a defined period in exchange for a periodic rent. In India, the Registration Act, 1908 mandates that any lease of immovable property for a term exceeding twelve months — or a lease reserving a yearly rent — must be registered at the Sub-Registrar's office; failure to register renders such a lease void as evidence of the terms agreed. An unregistered lease deed for more than one year cannot be relied upon in any court to establish tenancy rights. A lease deed is fundamentally different from a Leave and Licence Agreement (commonly used for residential properties in Maharashtra): under a Leave and Licence, no interest in the property is transferred to the licensee, making eviction simpler, whereas a lease creates an interest in the property giving the lessee stronger legal protection. Stamp duty on a lease deed is computed as a percentage of the total rent (and security deposit) over the lease term — this varies by state; for example, Maharashtra charges 0.25% of the total rent plus deposit for a lease up to 5 years, while Karnataka charges 0.5% of the rent for the term. Commercial leases above a certain threshold also attract GST: rental income from commercial property is subject to 18% GST if the lessor's aggregate turnover exceeds ₹20 lakhs per annum (₹10 lakhs for special category states). The tenant/lessee can claim Input Tax Credit (ITC) on GST paid for commercial leases used in the course of business.