Lucknow: The Department of Stamps and Registration is working on a proposal to reduce Stamp duty for the registration of a Rental agreement from 4% of the annual rent to a flat rate of Rs. 500. This is done to encourage more tenants and property owners to Rental agreementsOnly then are they entitled to protection under the Rent Control Act.
Currently, if a lease is not registered and a dispute arises, neither the government nor the police can take action to protect the interests of either party.
Ravindra Jaiswal, Minister for Stamps and Registration, said that due to the high stamp duty, which is four percent of the annual rent, with a maximum of four percent of the annual rent for six years, very few people were getting their contracts registered.
“Chief Minister Yogi Adityanath has asked us to look into this aspect of rental agreements. A new Rent Control Act has been introduced in 2022 which provides protection to both the parties, the tenant and the owner. However, due to the current stamp duty, very few people in the state are using this Act. Now we are proposing to simplify the tax structure so that people can register their agreements more easily,” he said.
Currently, if someone has to register his tenancy agreement, the stamp duty on it is 4% of the annual rent if the agreement is for one to five years, to 4% of the rent for six years if the agreement is for more than five years. With the proposed amendment, the tax will be a flat rate of Rs 500.
Jaiswal said a format was being worked out to make the payment directly without the need for lawyers or middlemen. In some time, he added, it would be possible to register the agreements online. The proposal is currently being refined and will be sent to the Cabinet for approval.
In June this year, the CM had directed the department to develop a system for e-registration. He had said that e-registration for tenures of up to 12 months should be done through government agencies and RERA-approved builders. Recently, the stamp department has come up with another proposal to reduce the stamp duty on registration of property division and transfer among relatives to a maximum of Rs 5,000.
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