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New stamp duty rates of Leave and

License agreements w.e.f 1st May 2013May 2, 2013 Stamp Duty article 36 a stamp duty rates, how to compute stamp duty rates

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license Raj Shah

The new stamp duty rates for leave and license agreements will be applicable from 1st May 2013. Have

the rates gone up? If your total rental income is below 5-7 Lac levels (approximately, see comparison

below) the stamp duty has actually dropped! The authorities have tried to rationalise the stamp duty

rates which is only fair. Earlier you paid a maximum of Rs.5,000/year as stamp duty for residential

properties. Now, that changes, the more you earn the higher the stamp duty. Here’s the new clause:

Here’s how you compute the new stamp duty rates:

1. Monthly rental x no. of months = A

2. Advance rent for the period = B

3. 10% of Refundable Deposit x no of years of the agreement = C

4. Total taxable amount D = A+B+C

5. Stamp Duty E = 0.25% x D

So what’s the difference between the old and new stamp duty rates? The earlier schedule was:

Here’s a comparison chart between the old and new rates for an agreement period

of 12 months across 5 scenarios.

So, do you think that the rationalisation of the stamp duty is fair? Look forward to

your comments.

Disclaimer: The author of the post has no authority on any property or tax

matters whatsoever and has made calculations based on his understanding of the

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duty. Please take guidance from the appropriate authority for your personal

calculations.

16 thoughts on “New stamp duty rates of Leave and

License agreements w.e.f 1st May 2013”

Sameer

Very Helpful… Thanks Raj.

July 23, 2013 at 8:19 pm

Raj Shah

Welcome Sameer. Glad you found it useful.

July 24, 2013 at 11:21 am

Anand

Popat

Hi Raj, in your initial explanation on how to compute the new stamp duty rates, you

have mentioned total taxable amount as A+B+C, which includes the advance

rent/security deposit.

However, in the comparison chart between the old and new rates, you have not

included advance rent/security deposit while computing the taxable amount under

“NOW” section. Request you to clarify the correct interpretation. Thanks in advance.

August 8, 2013 at 2:43 pm

August 8, 2013 at 11:46 pm

Raj Shah

Hi Anand,

Thanks for your comments.

In the new computation, only advance rent (or non refundable deposit) is

calculated and just to ensure parity between the examples, none of them have an

element of advance rent. Hence the current illustration is correct.

Avinash

Mordani.

Hi Raj,

Can you help me as in one case the License fee is Rs. 100,000/= per month

payable quarterly, deposit is Rs. 300,000/=, period is 3 years, and the license

fee for the first two quarters will be paid in advance to allow the licensor to

get some work done.what should be the stampduty payable?

Regards,

Avinash Mordani

August 9, 2013 at 6:07 pm

Raj Shah

Hi Avinash,

It will be Rs.10,750/- according to my calculation assuming the 6 Lacs

receipt for advance rent will be attached in the agreement along with the

refundable deposit.

September 4, 2013 at 9:11 pm

Avani Gada

Hi Raj.. Really a good article..I have one query..If i have monthly rent of Rs.15,000 for

11 months & Refundable Security Deposit of Rs.1,00,000/-. Therefore, as per your

calculation, total taxable amount will be Rs.1,75,000/- & stamp duty at the rate of

0.25% on that will be Rs.437.50.

However, when i asked many brokers, they gave me a calculation as follows:

They included the full amount of deposit in total taxable amount. Therefore, total

taxable amount became Rs.2,65,000/-. & Hence, stamp duty is Rs.662.50.

Please clarify..What is correct?

August 29, 2013 at 8:26 pm

Raj Shah

Hi Avani,

The stamp duty should be Rs.438. Only 10% of the deposit amount needs to be

calculated not the full deposit.

September 4, 2013 at 8:30 pm

Gopal Wagh

If the licensed period does not comprise the complete year e.g. L&L agreement is

entered for say 28 months…in that case are we supposed to consider 10% of

refundable security for three years or is there a way to consider it for exact 28

months. In few high stake agreements SD may be a very high amount…

August 30, 2013 at 11:05 am

Raj Shah

Hi Gopal,

Technically the deposit is to be calculated for 28 months but at the registrar they

tend to round it off to 3 years. This formula ensures the government earns more

money on high value transactions and I think that’s fair.

September 4, 2013 at 8:37 pm

Rupesh

Thanks Very precise and clear information,but my agent is demanding 5000 to get

the same done. My rent is 20k and deposit is 2l, which roughly works out to approx

700 for 11 months. Are there any other charges involved in registration, and is there

any way to get it done online…

Thanking you in advance…

Regards,

Rupesh Ganguly

September 25, 2013 at 11:01 am

September 27, 2013 at 5:15 pm

Raj Shah

Hi Rupesh,

Apart from the stamp duty, you have to pay Rs.1,000 to the sub registrar as fees

towards registration of the document. The agent would be charging you his fees

for helping you with the entire process of registration.

You can pay stamp duty and registration online but the total amount needs to be

above Rs.5,000.

hemang

parekh

Raj,, its nrealy a nice article. n the best is this is interactive forum where discussions r

doubts and raised an a solution is being attempted logically n practically…

September 26, 2013 at 1:39 pm

Raj Shah

Thanks Hemang, glad you liked it. Would encourage you to write as well on real

estate specific topics that interests you.

September 27, 2013 at 5:12 pm

sourabh jain

raj thanks a lot for the article and clarifications and calculation

October 28, 2013 at 1:47 pm

Raj Shah

Glad to be of help Sourabh.

November 14, 2013 at 10:23 pm