Stamp Paper

Stamp Paper

Who is to procure Stamp Paper: 

Procurement is need-based. If you need the agreement on Stamp Paper, you will have to procure stamp paper of the value you wish to use.

Normal Requirement of Agreement: 

if you do NOT want to register anywhere, you DO NOT need to have any Stamp Paper. It depends upon the trust of the Owner and Tenant to have it on Stamp Paper or not.

Our recommendation

We trust you, so we do not want the Stamp Paper Rent Agreement. But if your choice is to have we will sign it. Therefore, the Rent Agreement for giving you the services of receiving your mail & notices and forwarding these to you do not need to be on stamp paper. The Virtual Office performs mainly this service. So will give you the Rent Agreement and NOC without the Stamp Paper.

Your choice in other cases:

If you wish, you can use Stamp Paper of Rs.50/- or Rs.100/-  to maintain trust.

Registration of rent agreement

If you want to register with the registrar of Rent Agreements of the area. You will require the Stamp Paper of 2% value of annual rent. If the annual rental value comes to Rs.5,000/- Stamp Paper will be of Rs.100/-, If the rental value come to Rs.11,000/- the Stamp Paper will be of Rs.220/-. You will need to apply to the registrar and both the parties have to be present along with 2 witnesses along with their PAN and residence proof.

Registration with ROC

There are two (2) requirements of the Registrar of Companies to maintain the registered office of a company. The first (1st) requirement is to have a permanent place for a registered office on ownership or on a lease/rent basis. The second requirement is that every company has to maintain all the statutory registers of compliance and accounts at the registered office.

So, for the First requirement, you can have Virtual Office + Table Space (permanent or casual as may be required from time to time), to receive the mail & notices. For the second requirement, you require to pass a special resolution of the board of directors to keep your company registers and accounts at any other place [even at the residence of the Director].

Stamp Paper for Rent Agreement is to be of Rs.100/- under Article 35(i) of Delhi Govt. and for NOC of Rs.50/- under Article 4 of Delhi Govt required for Affidavit or Declaration or No objection Certificates. In total there have to be 2 stamp papers.

Registration with GST

There are two (2) requirements of the Commissioner of Goods & Service Tax to maintain the office of a company. The first (1st) requirement is to have a permanent place for a registered office on ownership or on a lease/rent basis for receipt of mail & notices. The second requirement is that every company has to maintain all the statutory registers of compliance and accounts at the registered office.

So, for the First requirement, you can have Virtual Office + Table Space (permanent or casual as may be required from time to time). For the second requirement, you require to pass a special resolution of the board of directors to keep your company registers and accounts at any other place [even at the residence of the Director]

Stamp Paper for Rent Agreement is to be of Rs.100/- under Article 35(i) of Delhi Govt. and for NOC of Rs.50/- under Article 4 of Delhi Govt required for Affidavit or Declaration or No objection Certificates. In total there have to be 2 stamp papers.

 

METHODOLOGY for your convenience

(1) You can procure both the stamp papers and send us for our signature OR send Rs.300/- to us to procure on your behalf.

(2) You can take one rent agreement of 11 months for Virtual Office @Rs.11,000/- and another rent agreement of 11 months for Space @Rs.2000/- per month. 

IN NUTSHELL

There will be two (2) Rent Agreements and two (2) NOC for Registration of Company and for registration with GST

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Following is an example of Stamp Paper – example

Stamp Paper
Stamp Paper

Registration of Rent Agreement on Stamp Paper

If an agreement is to be registered, the agreement must be on stamp paper and stamp duty and registration fee need to be paid for it to the Registrar of Documents. The registrar of our area is located at Kapashera border of Delhi with Gurgaon. For instance, in Delhi, for a lease of up to five years, the stamp paper cost is 2% of the total average annual rent of a year. Add a flat fee of Rs.100 and please note that the security deposit is part of the rent agreement.

Who is to provide the cost of Stamp Paper

 As per Section 29 (a)No.62(c)(c) of the Indian Stamp Act, 1899 “in the absence of an agreement to the contrary, the expenses of providing proper stamp shall be borne – in the case of a lease or agreement to lease- by the lessee or intended lessee.”

Is the Rent Agreement on Stamp Paper registrable

As per Article 35(a)(i) of Stamp Duty in Delhi read with Article 15, the Stock Holding Corporation of India gives the Stamp Paper for compulsorily registrable documents – NCT of Delhi under its Article 35(i) Lease-Rent deed up to 1 year is to be 2% of the whole amount payable and under its Article 35(ii) Lease- up to 5 years is to be 2% of the Average Annual Rent Received/ Payable.

Rental Agreement for 11 months is made to avoid the Strict Rental Law which applies for the Lease above 12 months is to be compulsorily registered with the Registrar of the area.

 

WHAT SHOULD WE USE – STAMP PAPER OR E-STAMP PAPER?

 

Now, there is no Stamp Paper system left in Delhi. The Prevailing system of Stamp paper has been replaced by the Government in the year 2011 (in Delhi). The government has appointed Stock Holding Corporation India Limited (www.shcilestamp.com) as their Central Record Keeping Agency and they are the Only CRA with Government for e-stamping. So, the Rental Agreement for Delhi and Karnataka should be made only on e-stamp paper.

The prescribed Stamp Duty for any Agreement in Delhi is Rs. 50/-, though after introducing e-stamp paper no fixed denomination is left except fixing the stamp duty on the basis of 2% of the annual rent. You can make Rent Agreement on e-Stamp Paper of any amount, still, it is always recommended to make Rent Agreement on the value of rent for 1 year.

A lease agreement of up to one year is 2% of the one-year rent. So if the annual rent is Rs.11,000/-, the Stamp Paper shall be of Rs.220/- only. As per GST, the Rent Agreement must be above Rs.100/- value irrespective of the amount of rent.

NOC – No objection Certificate should normally be without any stamp paper. But GST department need it on Stamp Paper of Rs.100/-.

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WHAT IF WE WILL NOT PAY THE PRESCRIBED STAMP DUTY?

 

It is always recommended to pay the prescribed Stamp Duty to avoid any Legal Crises. For each article, there is a different stamp duty set by the Government which varies from State to State. For example- in Delhi the Stamp Duty for Rent Agreement is Rs. 50/- while in Bangalore the Stamp Duty for Rent Agreement is Rs. 20/-.

For example – if you have made the Rent Agreement on Rs. 10/- e-Stamp paper and your approach to the Court due to any Legal Crises arise then Court can Charge the fine up to 10 times of the stamp duty amount to be paid.

So, it is always recommended to make the Rent Agreement on e-Stamp paper of Rs. 50/-.

Rs. 50 is the prescribed Stamp Duty for the Delhi State and commonly used as well.

 

 

 

Business registrations & returns

Our GST Suvidha Kendra is engaged in the registration of Proprietorship, Partnership, LLP, Private Limited Company, Charitable Trust, OPC, IEC, FSSAI, GST, MSME, and filing of all returns. To see our rates of services, you may Click Here.

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