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The Uttar Pradesh government is considering a proposal to cap registration fees for rent agreements, aiming to make the process more affordable and encourage legal compliance. Under the proposed structure, registration fees would be set at INR 500 for annual rents up to INR 2 lakh, INR 5,000 for rents between INR 2-5 lakh, and INR 20,000 for rents above INR 5 lakh. Currently, a 4% stamp duty on the total lease value has deterred many from registering agreements, leaving them without legal protection under the Rent Control Act, 2021. The proposal also includes incentives for women property owners and caps on stamp duty for ancestral property divisions.
In an effort to simplify the rental agreement registration process and encourage legal compliance, the Uttar Pradesh government is working on a proposal to cap registration fees for lease deeds. The Department of Stamp and Registration has suggested a tiered fee structure: INR 500 for annual rents up to INR 2 lakh, INR 5,000 for rents between INR 2-5 lakh, and INR 20,000 for rents exceeding INR 5 lakh. This initiative aims to alleviate the financial burden on tenants and landlords, promoting the formalization of rental agreements. Advertisement
Currently, registering a rent agreement in Uttar Pradesh incurs a 4% stamp duty on the total lease value. For example, a three-year lease at INR 20,000 per month amounts to INR 7.2 lakh, resulting in a stamp duty of INR 28,800. Such high costs have led many to forgo registration, leaving both parties without legal recourse under the Rent Control Act, 2021, in case of disputes. Minister of State for Stamp and Registration, Ravindra Jaiswal, emphasized that capping the fees would make the process more accessible and legally beneficial for all parties involved.
The proposal also includes measures to promote property ownership among women. A 1% rebate on property registration fees is being considered for women purchasing properties valued up to INR 1 crore, an increase from the current INR 10 lakh threshold. This move is expected to enhance financial independence and encourage more women to invest in real estate.
Additionally, the government is looking to cap stamp duty at INR 5,000 for the division of ancestral properties among family members spanning three generations. This measure aims to simplify the legal process of property division within families and reduce associated costs.
These proposals are currently being compiled into a report for submission to the state cabinet. Pending approval, the new fee structures and incentives could be implemented in the coming months, marking a significant shift in property registration policies in Uttar Pradesh.
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