New Rule for Rental Agreements in India from July 2025: E-Stamping Now Mandatory

A rental agreement establishes a legal bond between a landlord and tenant. It clearly defines rights, responsibilities and sets expectations. From July 1, 2025, India implemented new rules around digital stamping for rental agreements. This guide gives you a clear, easy-to-follow overview of what you need to know.

1. What is a Rental Agreement?

A rental agreement is a legally binding document that records:

• Parties’ names and contact details

• Property address and type (residential, commercial, etc.)

• Rent amount, payment frequency, and due date

• Security deposit and upkeep details

• Duration of tenancy, renewal, and termination terms

It provides clarity, reduces disputes and safeguards both parties.

2. New Digital Stamp Rule from July 2025

Starting July 1, 2025, calculations based on property value and rent now apply to stamp duty on rental agreements. Previously, online or manual stamps were sufficient. Today, tax authorities require e‑stamping of rental agreements.

Failure to comply may result in a ₹5,000 fine for both landlord and tenant. Platforms offering these services include state government portals or licensed vendors. Legal experts recommend electronic stamping to ensure validity of the agreement.

3. Mandatory Clauses in Rental Agreements

A legally valid agreement should include:

1. Names, addresses and PAN details of landlord and tenant

2. Property description in detail

3. Agreed rent and security deposit amount

4. Payment schedule and mode, plus late fee conditions

5. Notice period, renewal clauses, and termination terms

6. Maintenance responsibilities, utilities, subletting clause, and rent review terms

7. Condition of the property at move‑in and move‑out

8. Terms for resolving disputes and jurisdiction

These clauses protect both parties and reduce the risk of legal issues.

4. Security Deposit and Maintenance

Security deposit is usually 2–3 months’ rent for residential and may be higher for commercial properties. The agreement should include maintenance responsibilities, dispute resolution mechanisms, and how the deposit will be refunded.

5. Rent Review and Revision

To account for inflation and rising maintenance costs, a rental agreement often includes a rent escalation clause (usually 5 to 10 percent annually). Tenants should carefully negotiate the frequency of increments before signing.

6. Stamp Duty, E‑Stamping and Registration Requirements

• The stamp duty amount differs by state.

• E‑stamping is now mandatory from July 2025.

• Tenancy duration limits—typically 11 months without registration, 12 months or more with registration.

• Agreements longer than 11 months require registration with the Stamp Authority and Registrar to be legally enforceable.

7. Tax Filing Implications for Landlords

Rental income falls under Income from House Property and should be reported in ITR forms:

• Use ITR‑1 (Sahaj) if the only source of income is rental.

• Use ITR‑2 if you have other income such as capital gains or foreign assets.

Declare rent, deduct municipal taxes, and apply a standard deduction of 30 percent. If rent paid is above ₹1 lakh, the tenant must include TDS, otherwise the rent received is taxable without deduction.

8. Dispute Resolution and Legal Recourse

In case of dispute, tenants and landlords can seek resolution through:

• Amicable discussions as per the agreement

• Rent control tribunals or civil courts based on jurisdiction

• Optionally, arbitration clauses can be included

Keeping records of dated correspondence and payments helps in case of conflict.

FAQs for “New Rental Agreement Rules in India (July 2025)”

Q1: What is the new rule for rental agreements in India from July 2025?
From July 2025, all rental agreements must be executed on e-stamp paper. Using digitally printed stamp paper or unsigned/unregistered rental agreements may attract a penalty of ₹5,000.

Q2: Why has e-stamping been made mandatory for rental agreements?
The move aims to reduce fraud, ensure authenticity, and streamline the registration of rental contracts with proper legal backing.

Q3: Can I still use a digitally purchased stamp paper for rental agreements?
No, digitally purchased stamp papers (which are printed copies, not actual e-stamps) are not valid under the new rule. You must generate official e-stamp certificates from government-authorized portals.

Q4: What happens if I don’t follow the new rental agreement rule?
If you fail to comply with the e-stamping requirement, you may face a penalty of ₹5,000 and risk your agreement being considered invalid in legal disputes.

Q5: Is e-stamping required for all rental agreements across India?
The new rule is currently being enforced in several states and is expected to be uniformly applicable under the Model Tenancy Act guidelines. Always check your state-specific rules before proceeding.

Q6: How can I get an e-stamp for my rental agreement?
You can visit the official SHCIL portal (Stock Holding Corporation of India Ltd) or your respective state’s online e-stamping platform to generate a valid e-stamp certificate for your agreement.

Q7: Is registration of the rental agreement also mandatory along with e-stamping?
Yes, in many states, rental agreements for more than 11 months must be both e-stamped and registered with the sub-registrar. Check local state rules for shorter durations.

Q8: Who is responsible for getting the rental agreement e-stamped – tenant or landlord?
Both parties are jointly responsible, though in most cases, the tenant bears the cost. The process must be mutually agreed upon and reflected in the terms of the agreement.

Q9: Does this rule apply to commercial rental agreements as well?
Yes, the e-stamping requirement applies to both residential and commercial rental agreements executed on or after July 1, 2025.

Q10: Can I use an older rental agreement format after July 2025?
You can use an older format, but the agreement must be freshly executed with proper e-stamping and meet all new legal formalities to remain valid.

Q11: What is the penalty if I delay stamping or registration of my rental agreement?
Besides the ₹5,000 fine for using invalid stamp paper, late registration may also attract additional stamp duty or penalties based on state-specific laws.

Q12: Can I make a rental agreement online with e-stamp compliance?
Yes, several government and authorized private platforms offer complete digital rental agreement services, including e-stamping, drafting, and even e-signing with Aadhaar.

Q13: Is notarisation enough instead of registration and e-stamping?
Notarisation is not a substitute for e-stamping or registration. It may serve as secondary proof but will not hold up legally if the agreement isn’t duly stamped or registered.

Final Thoughts

A properly drafted rental agreement offers peace of mind and legal clarity. With the new e‑stamp rule from July 2025, digital stamping is mandatory. Making sure you comply means stronger legal protections for both parties.

Need Help Drafting or Registering Your Rental Agreement?

At Tradeviser, our legal experts draft clear and compliant rental agreements, handle e‑stamping, and guide you through registration. Avoid pitfalls and secure your rental arrangement with confidence.

Contact us today to get started or schedule a free consultation.