Stamp duty & need for registration of a leave & licence agreement of property situated in ahmedabad

This query is : Resolved 

30 September 2011

I have a commercial office in Ahmedabad. I'm planning to give it out on a Leave & Licence basis to a company. I have following queries :
(a) For a leave & Licence Agreement to be valid is it necessary for it to be of less than 12months ??? or can it be for a longer period, say 2-3 years ?
(b) Can such an agreement have a clause which could allow for extension of the period in order to obviate the need to sign a fresh Leave & Licence Agreement for continuation of renting out the property to same licensee ? Would this jeopardise the rights of the Licensor in anyways and provide the Licensee to claim protection under tenancy rules ?
(c) To have the protection of the law, is it mandatory for the licensor to pay stamp duty (if yes, then how much) and register (if yes, then what are the regn. charges) the document ?
(d) On what value of stamp paper should the Leave & Licence agreement be done ?


ajay sethi (Expert)
Click to Talk
30 September 2011

1) it need not be for period less than 12 months . it can be for longer period also

2) yes it can have a renewal clause . agreemen tto be renewed for further period of _______ months subject to consent of parties.
no protection can be claimed by licencee
3) yes mandatory to pay stamp duty . and have it registered .

4) depends upon licence fees charged and secuirty deposit taken

prabhakar singh (Expert)
30 September 2011

i agree with Mr.ajay sethi

Shailesh Kr. Shah (Expert)
01 October 2011

I also agree with Shri Ajay Sethi.

R.Ramachandran (Expert)
01 October 2011

The stamp duty is payable on the annual rental value (i.e. monthly rent x twelve).

Firdaus (Querist)
01 October 2011

I thank you for your prompt replies !!!

I have the following furthe questions :

Could you tell me what would be the value of the stamp duty and registration charges if the monthly rent was 20,000 and an interest-free refundable security deposit equal to 3 month's rent was taken ?

Further, if the area where the office is situated is in Navrangpura, at which office are the stamp duty and registration charges to be paid ? Kindly give address of both these offices if known to you experts.

Further,my query no (d)For what value should the Leave and Licence Agreement be franked for ? Someone told me that it has to be on Rs20 or Rs100 value.

Is the stamp duty to be paid in addition to this franked value or is the franking to be done equivalent to the stamp duty value computed based on annual rent ???

Further, if the Leave & Licence Agreement is already done on100 franking value, and stamp duty and registration of agreement are not done, then what is the remedy ??? Can they be done at a later date ??? Is there (if any, prescribed by law) any time limit within which the said stamp duty and registration of document need to be done ???

R.Ramachandran (Expert)
01 October 2011

Dear Mr. Firdaus,
Now you are speculating!
We have already indicated to you that the stamp duty is payable on the annual rental value. If the monthly rental value goes up naturally the annual value would also correspondingly go up. It is as simple as that. Whether it is 20000 per month or 2 lakh per month - I hope surely you will be able to arrive at the annual rental. Once this is done, you will also be able to calculate the stamp duty payable applying the rate of stamp duty applicable.

As regards where to get the registration done - where was your property first got registered? In the same sub-registrar's office you have to get the lease deed registered (unless there is any re-arrangement of the area falling under the sub-registrar's office - this you will come to know when you visit the said Sub-registrar's office).

If you want to get the lease deed registered, naturally you have to pay the deficiency in stamp duty, either by getting the stamp papers and attaching to the document, or getting affixation stamp from the sub-registrar's office, or by getting electronic stamping.

A just visit to your nearby sub-registrar's office will also help you a great deal.

raj kumar makkad (Expert)
01 October 2011

I do agree with sethi and Ramchandran.

prabhakar singh (Expert)
01 October 2011

Yes after so much guidance,you just need to visit any office nearby to ascertain office you are hunting for.

The document may are may not be demanding registration subject terms and state law.In Mumbai it is must.For Gujarat verify.

Do not make peace meal of documents as stamp duty is payable forthwith execution,whether registration required or not.So we do not have any criteria to call it franked/un-franked.

If no change made duties in different states costs per list given below:
1. Andhra Pradesh - 5%
2. Assam - 8.25%
3. Bihar - 9%
4. Goa - 8%
5. Gujarat - 10%
6. Haryana - 12.5%
7. Himachal Pradesh - 8%
8. Karnataka - 10.5 %
9. Kerala - 8.5%
10. Madhya Pradesh - 7.5%
11. Manipur - 7%
12. Maharashtra - 10 %
13. Meghalaya - 4.6 % to 9.9 %
14. Nagaland - 7.5 %
15. Orissa - 14.7 %
16. Punjab - 6 %
17. Rajasthan - 10 %
18. Tamil Nadu - 8 %
19. Tripura - 5 %
20. Uttar Pradesh - 10 %
21. West Benga - l7 %
22. Delhi - 8 %

You are asking dozen of questions,that means you have net installed,then there are dozen of stamp duty calculators on net.

A remoter service like this can not substitute a personal service despite any strive taken.Users of service must understand this constraint.Users are guided rightly so they become legally informed and no body deceives them.Just that nothing more.
Its a big happening let it run smoothly.

Firdaus (Querist)
01 October 2011

Gentlemen ! I thank you all once again for your prompt replies !

What prompted me to go on the net and search for answers was this :

While one Gujarat High Court lawyer in Ahmedabad told me that it was mandatory to get a Leave & Licence Agreement stamped and registered to ensure proper legal reliefs for the Licensor should anything go wrong another senior lawyer opined that a Leave & Licence Agreement can be done on a100 stamp paper/franking and it wasn't mandatory to get the same registered and didn't attract the heavy percentage of stamp duty that a lease agreement attracted for legal reliefs to be available to the Licensor should anything go wrong because :

while under a "Lease" agreement it was the right to "possession" that was being given to the lessee, under a "Leave & Licence" agreement, what is given is only the right to "occupation" to the Licensee and therefore it doesn't require to be registered and nor does it attract a high stamp duty of a lease agreement.

What I was further given to understand was to ensure that there are two witnesses and both the witnesses write their name, address and signature in their own hand. This is important to make the document absolutely valid.

My close friend in Mumbai told me that it was mandatory to register Leave & Licence agreements in Mumbai.

Honestly, I'm still a confused man...

I will be going to the sub-registrar's office on Monday to obtain clarity and will surely post my findings here.

prabhakar singh (Expert)
01 October 2011

DEAR author Firdaus !
Logic has no role! only state revenue policy has the role in these matters. In Maharashtra it is must but for Gujarat,my search spoke otherwise.That is why i advised you to check personally.Even on net all info is not current and updated,then sitting in Up how can i speak About Gujarat with authority ????

Firdaus (Querist)
02 October 2011

I fully appreciate your views Mr. Prabhakar Singh. Like I said, I'll visit the sub-registrar's office and find out and revert to you in this forum.

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