Renting out your flat: the leave and licence agreement in Maharashtra, registration and tax

Maharashtra registered 12,70,234 leave and licence agreements in 2023, according to the Inspector General of Registration's e-registration data, more than nine in ten of them online without anyone visiting an office. That ease hides how much rests on the step. A leave and licence agreement in Maharashtra must be in writing and registered, the duty is the landlord's, and a landlord who skips it risks a fine or jail and, in any dispute, faces an occupant whose version of the terms prevails unless the landlord proves otherwise. An owner abroad has one more thing to learn: the tenant deducts tax from every payment, at the rate set for non-residents.

What you need before you start#

A signatory, if you will be away. An owner abroad acts through an attorney, and a power of attorney signed overseas has to be notarised, apostilled or attested at an Indian mission, and stamped here within three months of arriving before it works in Maharashtra, the chain the NRI buyer's playbook sets out. It takes weeks, so start it first.

Proof the flat is yours to license: the registered agreement for sale and, for a new flat, the possession letter.

PAN and Aadhaar for both parties, for the tenant's TDS and the online route.

The terms: licence fee, refundable deposit, start and end dates, notice, who pays the society's bills, and how the tenant's TDS will work.

Your society's bye-laws, for the notice they require.

The procedure#

1. Draft the agreement in writing#

Write down the monthly licence fee and its due date, the deposit and when it comes back, the start and end dates, the notice either side may give, who pays the maintenance bill and any non-occupancy charge, and an inventory of fittings. A non-resident owner adds the clause most templates lack: the tenant deducts at the rate in the owner's lower deduction certificate, or the full non-resident rate without one, and hands over the TDS certificates.

Article 36A of the Maharashtra Stamp Act sets the duty at 0.25 percent of the licence fee for the whole period, with any refundable deposit counted as if it earned a notional 10 percent a year. A two-year licence at Rs 25,000 a month with an Rs 1 lakh deposit carries Rs 6,00,000 of fee and Rs 20,000 of notional interest: about Rs 1,550 of duty.

What you will see: a draft with every date and rupee filled in.

Red flag: a resident landlord's template, with no tax clause, when you are not resident.

2. Register it, online or at the sub-registrar#

Registration under the Registration Act, 1908 is the other half of section 55, and the duty stays with the landlord whoever handles the paperwork.

Online, through the registration department's e-registration service, the agreement is submitted on the department's system, each party authenticates through Aadhaar-based e-KYC, the duty and fee are paid online, and nobody visits an office. Most of the state registers this way; in Mumbai, 3,03,339 of 3,37,012 agreements in 2023 went online.

At a sub-registrar office, the parties or an attorney present the agreement in person, much as on registration day for a purchase. This is the route when someone executing it cannot complete the Aadhaar check online, and an owner abroad can use it through an attorney holding a power of attorney valid in Maharashtra.

The fee is Rs 1,000 where the flat is in a municipal corporation or council area and Rs 500 elsewhere, plus a document handling charge.

What you will see: a registered agreement with its registration number, or a registered document to download.

Red flag: an agreement that was notarised and never registered.

3. Make sure the police have the tenant's details#

The registration department has built the police step into the online route: tenant details from an online registration go to the chosen police station without a separate visit. In June 2025 the Registration and Stamps Department said the link was working at 98 police stations in Mumbai, 64 in Pune city and 34 in the rural areas around Pune. The newer version of the system, tied to the police's crime-tracking network, is built to share tenant details with all 1,203 police stations in the state. Mumbai Police also take tenant details through an online form.

After an office registration, or where a station is not yet linked, give the station the tenant's details yourself. Either way, keep the acknowledgement: the society will ask for a copy.

What you will see: an acknowledgement to file with the agreement.

Red flag: a tenant who has moved in with no police acknowledgement of any kind.

4. Give the society its copies#

Under bye-law 43 of the model bye-laws most housing societies adopted, a member letting a flat gives the society eight days' notice, with copies of the registered agreement and the police intimation and an undertaking to pay the non-occupancy charge. The bye-law asks for notice, not permission. The charge is capped at 10 percent of the service charges and is not levied where the member's family, as the bye-laws define it, occupies the flat; what a society may lawfully collect covers the rest. Revised model bye-laws were in draft in 2026, so read your society's registered text.

What you will see: a non-occupancy line on the next maintenance bill.

Red flag: a "permission fee", or a non-occupancy charge worked out on the whole bill.

When the licence ends#

Section 24 of the Rent Control Act is why the dates matter. A licensee of a flat given for residence must hand back possession when the licence period expires. If they do not, the landlord applies to the Competent Authority under the Act, which has one question to settle, whether the period has expired, and once satisfied orders eviction; until dispossessed, the licensee owes damages at double the licence fee in the agreement. Both run from the agreement's own dates and fee, which is why registration matters: without it, section 55 lets the occupant's account of those terms prevail unless the landlord proves otherwise.

An analogy: a library loan#

A library lends a book for a fixed period, stamps the due date in its own register and fines every late day, and nobody argues about the due date because the register settles it. A leave and licence is a library loan of a flat, with the late fine set by law at double the fee and the registration as the register. Lend without the register, and the law prefers the borrower's memory of the due date.

The tax: what the tenant deducts, and what you owe#

Two things happen to the rent: the tenant may deduct tax before paying it, and the landlord is taxed on it. The first depends on whether the landlord is resident in India.

A resident landlord's tenant, if an individual or HUF not liable to a tax audit, deducts 2 percent under section 393(1) of the Income-tax Act, 2025, formerly section 194-IB of the 1961 Act, and only where rent exceeds Rs 50,000 for a month or part of one. The rate was cut from 5 percent. It is deducted once, from the rent for the last month of the tax year or tenancy, filed on Form 141 and certified on Form 132.

A non-resident landlord's tenant deducts under section 393(2), formerly section 195: 30 percent plus any surcharge and 4 percent cess, about 31.2 percent before surcharge, from every payment, with no threshold, and needs a TAN to deposit it. The landlord can apply online on Form 128 under section 395, which replaced Form 13 under section 197, for a lower rate, but only before the payments it covers. Buying from an NRI seller shows the same machinery on a sale.

The landlord's own tax is computed the same way for both: under sections 21 and 22 of the 2025 Act, rent less the municipal taxes actually paid, less a flat 30 percent, less interest on the loan for the flat, as how a let flat is taxed works through. On a flat bought under construction, interest paid before completion is deducted in five equal instalments from the year of completion. Deductions above the real liability come back as a refund through the landlord's Indian return.

Rohit plans the letting before the keys exist#

Rohit (illustrative, as our stories always are) is buying an Rs 86 lakh flat in a Pune project from abroad, on a home loan under a tripartite agreement, and the 12th of his wing's 20 slabs was cast when he checked a slab demand from abroad. He means to let it from possession until he moves back, and planned the letting from abroad, with his brother-in-law in Pune to act for him under a power of attorney. Names and numbers in this story are illustrative.

The power of attorney goes first, because it takes weeks: his draft names the flat and the acts, signing and presenting the agreement and giving the police and the society their copies. The snag was the agreement template. His brother-in-law sent the one he uses for his own flat, with no tax clause, because his own tenant pays him under Rs 50,000 a month and he is resident, so nothing is deducted. Rohit is not resident. At an illustrative Rs 25,000 a month, his tenant must deduct about Rs 7,800 from every payment, Rs 93,600 a year, and obtain a TAN. With his loan interest coming off the rent, his real tax may be far lower in the early years, so the plan now includes a Form 128 application before the first rent falls due, and a clause telling the tenant which rate to deduct.

The society's part is short: eight days' notice, two copies, and a non-occupancy charge of at most 10 percent of the service charges. The stamp duty, about Rs 1,550 on a two-year licence with an Rs 1 lakh deposit, and the registration fee went into his notes. What they cannot hold is the start date: the handover, which is the promoter's to file.

A rent plan should rest on the filed possession date, not the brochure's: ReraGenie's free project page shows the first promised date beside the current one and every extension with the promoter's stated reason, and a Rs 299 project watch emails you when that project's filing changes.

What the report shows before there is anything to let#

For a covered Maharashtra project, the Rs 499 ReraGenie buyer report answers the questions a letting plan rests on:

• The possession story: the first promised completion date against the current one, the earliest a licence can start.
• Construction pace against the district: how this project's filed progress compares with others in its district, a test of whether the current date is plausible.
• Rights under RERA, with a worked delay-interest example: what a late handover entitles you to while EMIs run and no rent arrives.

It includes the project's filed documents as a ZIP and a free 90-day project watch.

The checklist, in one place#

• Start any power of attorney weeks ahead; stamp it in Maharashtra within three months of arriving.
• Draft in writing, with a tax clause if you are a non-resident.
• Pay stamp duty: 0.25 percent of the fee, plus a notional 10 percent a year on the deposit.
• Register online or at a sub-registrar office; notarising is not registering.
• Make sure the police have the tenant's details; keep the acknowledgement.
• Give the society eight days' notice with both copies.
• Settle the tenant's TDS before the first payment, applying on Form 128 first for a lower rate.
• Diary the end date: section 24's remedies run from it.

Methodology and sources#

• Maharashtra Rent Control Act, 1999, sections 24 and 55; Maharashtra Stamp Act, Article 36A; the registration fee for leave and licence agreements.
• Inspector General of Registration, Maharashtra, e-registration data 2018 to 2024: leave and licence registrations in 2023, statewide and in Mumbai.
• Registration and Stamps Department on the police link, as reported in Pune in June 2025.
• Model bye-laws for co-operative housing societies, bye-law 43; Maharashtra Co-operative Societies (Amendment) Rules, 2026, on non-occupancy charges.
• Income-tax Act, 2025: sections 21, 22, 393(1), 393(2) and 395; Forms 128, 132 and 141.
• Illustrative arithmetic: ReraGenie, on an assumed licence fee of Rs 25,000 a month and an Rs 1 lakh deposit.

This article is educational and not legal or tax advice. Confirm the position for your own letting with a lawyer who practises in Maharashtra, and the figures for your own case with a chartered accountant.