tenants do not want to pay stamp duty. Both the landlord and the tenant mutually agree on a notarised lease deed which most of the time results in litigations in civil courts,” says Jasbir Singh Malik, a Supreme Court lawyer.
Some experts are of the opinion that lack of penal provisions in the Registration Act could be the reason why both parties do not abide by it. However, tenants can be booked under the Indian Stamp Act for not paying stamp duty on a rent agreement exceeding 11 months.
In Noida, in the past three years, the revenue department has booked more than 1,000 tenants evading stamp duty by not getting lease deeds registered. A penalty five to 10 times of the amount of stamp duty has been imposed on the offenders by the court.
“The landlords, often out of greed for money and in a hurry to rent out their premises, don’t insist upon a registered lease deed. They also think that it’s the tenant who faces the music for stamp duty evasion. Such landlords, however, forget that they are more vulnerable than the tenants as the latter can drag them to courts by refusing to vacate the premises,” says a revenue official in Noida.