How the calculation works

Stamp duty on a rent agreement is a tax on the document, not on the rent. Three decisions made by each state determine what you pay: what counts as the taxable amount, what rate applies to it, and whether a cap or a floor intervenes.

The taxable amount

Every state starts with rent and then diverges. Karnataka and Tamil Nadu add the security deposit in full. Delhi works from the average annual rent and largely leaves the deposit alone. Maharashtra takes a third path, adding notional interest of ten percent a year on the refundable deposit rather than the deposit itself. These are not small differences: on a large deposit they change the answer by an order of magnitude.

The rate

Rates on short residential agreements sit between a quarter of a percent and two percent across the states covered here. Commercial premises are frequently charged more, sometimes at double the residential rate.

Caps and minimums

Some states cap residential duty at a fixed amount, so beyond a certain rent and deposit the bill stops growing. Others impose a minimum, so a very low rent still attracts a floor amount. A cap is what makes large Bengaluru deposits affordable to stamp; the absence of one is what makes Chennai expensive.

Registration is a separate cost

Stamp duty makes the agreement admissible. Registration records the tenancy with the state and carries its own fee. Most states make registration compulsory once the term reaches twelve months, which is why the eleven-month agreement became the national default. Maharashtra requires registration regardless of term.

Why eleven months

Section 17 of the Registration Act, 1908 requires leases from year to year, or exceeding one year, to be registered. Eleven months falls outside that. There is nothing else significant about the number.

Reviewed 8 September 2026. Sources and method are set out on the sources page.