Revised Stamp Duty Rates on Leave and License Agreements in Gujarat (Effective 10th April 2025)
Introduction:
The Government of Gujarat, through the Gujarat Stamp (Amendment) Act, 2025, has introduced significant changes to the stamp duty structure on leave and license agreements for both residential and commercial properties. These changes come into effect from 10th April 2025 and aim to streamline stamp duty collection while aligning rates with current property use trends.
What is a Leave and License Agreement?
A leave and license agreement is a legal document that allows the licensee (tenant) to occupy the premises of the licensor (owner) for a specified duration without transferring any interest in the property. Unlike a lease, it does not create any tenancy rights.
Key Changes in Stamp Duty Structure:
The revised rates are categorized based on the purpose (residential or commercial) and the duration of the agreement. Here is a detailed breakdown:
Stamp Duty Rates for Residential Property:
| Duration of Agreement | Stamp Duty Payable | 40% Surcharge on Stamp Duty | Total Stamp Duty Payable |
|---|---|---|---|
| Less than 1 year | ₹500 (Flat) | ₹200 | ₹700 |
| 1 to 5 years | Minimum ₹1,000 OR 1% of average annual rent | ₹400 OR 40% of 1% of average annual rent | Minimum ₹1,400 OR 1% of average annual rent + 40% |
| 5 to 15 years | Minimum ₹10,000 or 2% of average annual rent | ₹400 OR 40% of 2% of average annual rent | Minimum ₹14,000 OR 2% of average annual rent + 40% |
| 15 to 30 years | Minimum ₹20,000 OR 3% of average annual rent | ₹8000 OR 40% of 3% of average annual rent | Minimum ₹28,000 OR 3% of average annual rent + 40% |
| 30 to 99 years | 2.5% of consideration or market value | 40% of 2.5% of consideration or market value | 2.5% of consideration or market value + 40% |
| More than 99 years | As per conveyance deed | 40% of amount as per Conveyance Deed | Amount as per Conveyance Deed + 40% |
Stamp Duty Rates for Commercial Property:
| Duration of Agreement | Stamp Duty Payable | 40% Surcharge on Stamp Duty | Total Stamp Duty Payable |
|---|---|---|---|
| Less than 1 year | ₹1,000 (Flat) | ₹400 | ₹1400 |
| 1 to 5 years | Minimum ₹5,000 OR 1% of average annual rent | ₹2,000 OR 40% of 1% of average annual rent | Minimum ₹7,000 OR 1% of average annual rent + 40% |
| 5 to 15 years | Minimum ₹10,000 OR 2% of average annual rent | ₹4,000 OR 40% of 2% of average annual rent | Minimum ₹14,000 OR 2% of average annual rent + 40% |
| 15 to 30 years | Minimum ₹20,000 OR 3% of average annual rent | ₹8,000 OR 40% of 3% of average annual rent | Minimum ₹28,000 OR 3% of average annual rent + 40% |
| 30 to 99 years | 2.5% of consideration or market value | 40% of 2.5% of consideration or market value | 2.5% of consideration or market value + 40% |
| More than 99 years | As per conveyance deed | 40% of amount as per Conveyance Deed | Amount as per Conveyance Deed + 40% |
Examples for Better Understanding:
| Type | Duration | Details | Duty |
|---|---|---|---|
| Residential | 11 months | Rent: ₹20,000/month | Flat ₹500 + ₹200 = ₹700 |
| 10 years |
Rent: ₹30,000/month Annual Rent: ₹3,60,000 2% of ₹3,60,000 = ₹7,200 Less than minimum ₹10,000 + 40%, so Duty = ₹ 14,000 |
₹ 14,000 | |
| 100+ years |
Market value: ₹1 crore Duty as per conveyance deed (Generally 4.9% of market value) + 40% |
₹4,90,000 (approx.) + 40% | |
| Commercial | 3 years |
Rent: ₹50,000/month Annual Rent: ₹6,00,000 1% of ₹6,00,000 = ₹6,000 Greater than minimum ₹5,000, so Duty = ₹6,000 + 40% |
₹ 8,400 |
| 25 years |
Rent: ₹1,00,000/month Annual Rent: ₹12,00,000 3% of ₹12,00,000 = ₹36,000 Greater than minimum ₹20,000, so Duty = ₹36,000 + 40% |
₹ 50,400 | |
| 90 years |
Premium paid: ₹50,00,000 Duty = 2.5% of ₹50,00,000 = ₹1,25,000 + 40% |
₹ 1,75,000 |
Conclusion:
These new stamp duty rates have simplified the calculation while differentiating between short-term and long-term use cases. Builders, landlords, tenants, and legal professionals must take note of these changes for correct compliance. For assistance with drafting, calculating duties, or registration, feel free to contact our expert team at Team Gujreraexperts.
