India’s New Rent Rules (2025)  - A simple guide for tenants and landlords

                                                  (With Kerala details, stamp duty, registration fees and a worked example)

India updated its rental rules in 2025 to make renting fairer, clearer and easier to manage. The reforms reduce disputes, limit very large deposits, make rent increases predictable and speed up solutions when problems happen. Below is everything you need to know in plain language.

Why the rules changed?

For long, renting in India often relied on informal agreements or verbal promises. That caused problems: unpredictable rent hikes, very large security deposits, unclear eviction procedures and long delays in resolving disputes. The 2025 reform creates a clear legal framework so both tenants and landlords know their rights and duties from the start.

Big changes at a glance

1. Written agreement and registration

• Write it down. Rent agreements must be in writing. Verbal promises are not enough for statutory protection.
• Register quickly. Where states have adopted the Model Tenancy Act or local rules, the signed agreement must be submitted to the local Rent Authority or online portal-usually within two months of signing. Registration gives the agreement an official registration number and legal standing.

2. Lower security deposits

• Residential deposits are usually capped at 2 months’ rent.
• Commercial deposits (non-residential) are typically capped at 6 months’ rent.
  These caps lower the upfront cost for tenants and create uniformity.

3. Predictable rent increases

• Rent hikes must follow a formula or percentage written in the agreement (for example, a fixed yearly percentage or an index-linked change). The landlord must give advance notice before increasing rent. This makes household budgeting easier.

4. Stronger protection against sudden eviction

• A tenant cannot be evicted without following a clear legal procedure. Landlords must give formal notice and use the Rent Authority or tribunal to enforce eviction. This prevents abrupt, unlawful removals.

5. Faster dispute resolution

• New rules set up Rent Courts / Tribunals and online portals to decide disputes quickly  the target is about 60 days. Many states also require mediation first to resolve small disagreements.

6. Tax and income changes that help landlords

• The TDS threshold for rental income was increased (helpful for small landlords).
• From April 2025, rental income filing and classification were simplified under “income from house property.”

7. Quicker remedies for non-payment

• If a tenant misses rent three or more times in a year, the case can be fast-tracked to the tribunal for quicker resolution.

8. Incentives for landlords to improve properties

• Some state schemes may give tax credits or incentives to landlords who keep rents affordable or install energy-efficient upgrades.

9. Digital, transparent records

• The reforms promote digital agreements, e-stamping, online registration and bank transfers for rent. Digital records reduce fraud and make disputes easier to resolve.

Why these changes matter?

Tenants gain: lower upfront money, legal security, predictable rent increases and faster access to dispute resolution.
Landlords gain: faster recovery when rent is unpaid, better legal proof (registered agreements and digital receipts), simplified tax rules and clearer eviction remedies.
Cities and housing markets gain a more reliable rental sector that helps mobility and urban living.

Practical steps - what tenants should do now

1. Insist on a written agreement and check it carefully.
2. Make sure the agreement is registered (online or with the Rent Authority) within the state time limit-often 60 days. Keep the registration receipt.
3. Check deposit limits (two months for residential). If asked for more, ask for a written reason.
4. Pay rent by bank transfer or other digital modes and keep receipts. Avoid cash without a receipt.
5. Read the rent-increase clause so you know how hikes are calculated and how much notice you’ll get.
6. If served a sudden vacate demand, don’t leave immediately-ask for formal notice and approach the Rent Authority or a lawyer.
7. Seek help from tenant groups or legal aid if uncertain.

Practical steps - what landlords should do now

1. Use authorised e-stamping and register agreements quickly.
2. Do not demand deposits above the legal cap; give a proper receipt and record.
3. Include a clear rent revision formula in the agreement (annual % or index).
4. Keep proof of ownership and KYC (PAN/Aadhaar) ready for registration.
5. Require rent by bank transfer when possible and issue receipts.
6. If tenants default, follow statutory notice procedures and do not evict by force-file with the Rent Authority.

How disputes are handled now

1. Try to resolve by discussion or mediation-the rules encourage mediation.
2. If mediation fails, file a complaint with the Rent Authority / Tribunal (many states allow online filing).
3. Fast hearings - intended decision time is around 60 days.
4. If dissatisfied, appeal to the higher forum or court as permitted by state law.

Checklist for a compliant rent agreement

• Full names, addresses and ID of landlord & tenant
• Full property address and inventory of fittings & meter readings
• Start & end date of agreement and renewal rules
• Monthly rent, due date and mode of payment
• Security deposit amount and refund procedure (with interest if state requires)
• Maintenance and utility responsibilities
• Rent revision formula and notice period
• Subletting and assignment rules
• Termination and eviction notice periods and grounds
• Dispute resolution procedure (mediation → Rent Authority)
• Signatures of both parties and two witnesses
• Place for Rent Authority registration number and stamp duty receipt

Kerala - how to register and pay stamp duty (practical guide)

Kerala follows the national reform but has its own local process and fees (registration, stamp duty and online e-stamping). The Kerala Finance Act 2025 contains the state’s updated rules and fee changes; it is the authoritative source for fees and procedures. See the Kerala Gazette / Finance Act for full details. 

Where to register in Kerala

1. Kerala Rent Authority / state tenancy portal - most registrations are done online. The portal issues a Registration Number / Receipt.
2. Sub-Registrar office - some registrations can be done in person at the sub-registrar if required.

Documents to keep ready for Kerala registration

• Signed rent agreement (with required clauses)
• Identity & KYC of landlord and tenant (Aadhaar / PAN / Passport)
• Proof of ownership (sale deed / tax receipt) of landlord
• Inventory and meter readings (photos recommended)
• E-stamp receipt and registration fee payment proof
• Bank details for refunds/compensation

Stamp duty & registration - usual Kerala practice

Kerala charges stamp duty on lease/rent agreements and a separate registration fee. The exact fee can be either:

• A percentage of the total rent for the entire term, or
• A small fixed slab amount (for short agreements), and a nominal registration fee.

The Kerala Finance Act 2025 and the State Stamp rules set the exact rates and thresholds  consult the official Kerala Stamp Office / e-stamp portal for the current schedule. (The Finance Act 2025 is the authoritative government source for state tax and fee changes.) 

How stamp duty is commonly computed (two methods)

A. Percentage of total rent for the term

• Total rent for the term = monthly rent × number of months.
• Stamp duty = (specified %) × Total rent. Some states also apply duty to the deposit value.

B. Fixed slab or nominal duty

• A small fixed amount depending on duration (for example: ₹200 for up to 3 years, ₹500 for 3-5 years). Check the state table.

Note: Kerala’s exact method and rates are in the Kerala Finance Act and Stamp Act rules; always check those official tables before payment. 

Worked example (Kerala)  clear, step-by-step (use real official figures when you check)

Scenario (example only):

• Monthly rent = ₹20,000
• Term = 24 months (2 years)
• Deposit cap (residential) = 2 months’ rent = ₹40,000
• Illustrative stamp duty rule: suppose Kerala requires 0.25% of total rent (this is an example - check the state table).
• Illustrative registration fee = ₹300.

Step 1 - Total rent for the term
Total = ₹20,000 × 24 = ₹480,000

Step 2 - Stamp duty (example at 0.25%)
Stamp duty = 0.25% of ₹480,000 = ₹1,200

Step 3 - Registration fee (example)
Registration fee = ₹300

Step 4 - Total cost for stamp + registration (example)
Total = ₹1,200 + ₹300 = ₹1,500

If Kerala uses a slab (say ₹200 for agreements up to 3 years), then:
Stamp duty = ₹200 → Total = ₹200 + ₹300 = ₹500.

Important: These are illustrative calculations to show how to compute. Always confirm the official stamp duty percentage or slab and the exact registration fee on the Kerala government portal or at the sub-registrar before paying.

Extra Kerala notes from the 2025 finance and registration changes

• Digital stamping: Kerala moved toward digital (e-stamp / unique identification marking) for documents during 2025. The Kerala Finance Act 2025 includes provisions that support digital stamps and state fee changes; users should use authorised e-stamp vendors when buying stamp duty. 

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• Court / fee changes: The Finance Act 2025 also adjusted many court fees and schedules (important if a dispute goes to court). For exact fee tables and the small court/document charges, consult the Finance Act / Gazette. 

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Sample short clause you can put in your Kerala agreement

Registration & Stamp Duty
“This Agreement shall be registered with the Kerala Rent Authority / appropriate office within sixty (60) days from the date of execution. The parties shall pay the stamp duty and the registration fee required by the Government of Kerala and shall upload the e-stamp / payment proof during registration. The Registration Number issued by the Authority shall be recorded here.”

Practical tips & final checklist

• Always register the agreement - it is inexpensive and protects both parties.
• Use bank transfers so every rent payment has a clear record. Keep copies of receipts.
• Do not agree to illegal demands (excess deposit, cash-only payments without receipt).
• If in doubt, check the Kerala Stamp Office, the Kerala Rent Authority portal and the Kerala Gazette (Finance Act 2025) for current duties and fees. The official Finance Act is available in the Kerala Gazette and online, and should be consulted for exact rates and changes. 

For More Information & Support Please Contact 

Dr. Muhammed Mustafa C T.
Senior Tax Consultant, BRQ Associates
???? +91 96331 81898
???? brqassociates@gmail.com | ???? www.brqassociates.com