India Lease Deed
Also known as: Commercial Lease Agreement · Commercial Lease Agreement · Rent Deed · Commercial Rent Agreement
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Lease Deed
Also called: Commercial Lease Agreement, Commercial Lease Agreement
Legal Requirements
India Legal Requirements
Key India statutes and obligations that apply to your lease deed.
Governed by the Transfer of Property Act 1882 and the Registration Act 1908
Commercial leases for 12 months or more must be registered under the Registration Act 1908
Stamp duty on commercial leases is significantly higher than residential — varies by state (e.g., Maharashtra: stamp duty on commercial lease based on rental value and term)
Shops and Establishment Acts (state-specific) regulate working conditions in commercial premises — register the establishment within 30 days of commencing business
Local body permissions, trade licences, and No Objection Certificates (NOCs) may be required for specific commercial activities
Service tax/GST: commercial rent is taxable under GST at 18% — landlord must invoice and the tenant can claim ITC if registered
Restrictions & Key Considerations
Pre-existing tenants protected under state Rent Control Acts may resist eviction even from commercial premises
Certain commercial properties (shops, offices) in older areas may be governed by state Rent Control Acts that restrict rent increases and eviction
Courts apply Section 106 of the Transfer of Property Act for notice periods unless the lease specifies otherwise
Subletting typically requires express landlord consent — implied consent is insufficient for registered leases
FAQ
India Lease Deed FAQ
Common questions about the lease deed under India law.
Does GST apply to commercial rent in India?
Yes. Commercial rent (renting of immovable property for business) is a taxable supply under the GST Act. GST at 18% applies if the landlord's aggregate turnover exceeds ₹20 lakh (registration threshold). GST-registered tenants can claim input tax credit on the GST paid, reducing the effective cost.
Must a commercial lease be registered in India?
Yes, if the lease term is 12 months or more under Section 17 of the Registration Act 1908. Registration requires executing the lease on stamp paper (correct denomination) and presenting it at the Sub-Registrar's office. An unregistered long-term lease cannot be used as evidence in civil court proceedings.
What are typical rent escalation clauses in Indian commercial leases?
Most Indian commercial leases include an annual rent escalation of 5–15%, or lock-in periods (typically 3–5 years) with rent revision every 3 years. Market practice in metros like Mumbai and Bengaluru is 5% per annum compounded, or 15% every 3 years. The lease should specify the escalation mechanism, base year, and any cap.
What is a security deposit in an Indian commercial lease?
Commercial security deposits in India are typically 3–10 months' rent (higher than residential), held interest-free by the landlord. In Mumbai and Bengaluru, 6–10 months is common. The deposit is refundable at lease end (less deductions for damages). Unlike the UK or Australia, there is no statutory scheme governing commercial security deposits.
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Commercial Lease Agreement by Country
Laws vary significantly by country. Find the right form for your jurisdiction.
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