East Bengaluru buyer answers
Renting out a flat in Karnataka: agreement, stamp duty and police check
Direct answer: Under rental agreement Karnataka rules, a home let for up to a year pays stamp duty of 0.5% on the rent and deposit, capped at ₹500. Longer leases pay 1% with no cap and must be registered. Tell the local police station about your tenant; the state's online tenant service was listed as under modification on 19 Oct 2026.
Disclosure: acre&key’s advice is free to buyers.
Verify with your lawyer: Lease terms, deposits and eviction are legal matters. This page is general information. Have a lawyer review the agreement.
Key takeaways
- Up to one year, residential: 0.5% of rent plus deposit, maximum ₹500 (Article 30(1)(i)).
- One to ten years: 1% of average annual rent plus deposit, no cap, and registration is compulsory.
- The deposit counts. "Money advanced" includes the security deposit, refundable or not.
- Police verification is done at the station for now; the official online listing says "Service Under Modification".
How much stamp duty does a rental agreement pay?
Article 30(1) of the Karnataka Stamp Act sets duty on leases of immovable property (Karnataka Stamp Act):
| Term | Duty |
|---|---|
| Up to 1 year, residential | 50 paise per ₹100 of average annual rent, any lump-sum fee and money advanced, maximum ₹500 |
| Up to 1 year, commercial | 50 paise per ₹100, no cap |
| Over 1 year, up to 10 years | ₹1 per ₹100 |
| Over 10, up to 20 years | ₹2 per ₹100 |
| Over 20, up to 30 years | ₹3 per ₹100 |
| Over 30 years or perpetual | Same as a sale, on the higher of the lease value and the market value |
"Money advanced" includes the security deposit, whether refundable or adjusted against rent. A lease to a spouse, parent, child, brother or sister carries fixed duty instead: ₹5,000 within BMRDA, BBMP or city corporation limits, ₹3,000 in municipal council or town panchayat areas, ₹1,000 elsewhere.
Do you have to register it?
Leases from year to year, for more than a year, or reserving a yearly rent must be registered under section 17(1)(d) of the Registration Act 1908. That's why many landlords use 11-month agreements. Registering a shorter agreement is still possible and gives both sides a stronger record. Registration runs through Kaveri 2.0, which calculates the fee. Our Kaveri registration steps walk through the visit, and Karnataka Digital e-Stamp covers paying duty online.
Worked example 1: an 11-month agreement
Illustrative. Rent ₹25,000 a month, deposit ₹1,50,000, 11 months.
| Step | Maths | Result |
|---|---|---|
| Rent for the term | ₹25,000 × 11 | ₹2,75,000 |
| Plus deposit | + ₹1,50,000 | ₹4,25,000 |
| Duty at 0.5% | ₹4,25,000 × 0.5% | ₹2,125 |
| Capped at | ₹500 |
Almost any residential agreement up to a year hits the ₹500 cap.
Worked example 2: a three-year lease
Illustrative. Same flat, three years, 5% yearly increase, same deposit.
| Year | Annual rent |
|---|---|
| 1 | ₹3,00,000 |
| 2 | ₹3,15,000 |
| 3 | ₹3,30,750 |
| Average | ₹3,15,250 |
Duty: (₹3,15,250 + ₹1,50,000) × 1% = about ₹4,653, rounding up to the next ₹100 as the Article does. Plus the registration fee, and registration is compulsory.
How does tenant police verification work?
The state's online service listing for "Police - Tenant Verification" showed "Service Under Modification" on 19 Oct 2026 (Seva Sindhu listing). Until it's back, go to the police station covering the flat, ask for its tenant information form, attach the tenant's photo ID, permanent address proof and photos, and keep the stamped acknowledgement. Some websites describe other online routes; we couldn't confirm them on an official portal.
What should a new owner sort out first?
- Khata in your name, through the civic body's mutation process for the area the flat sits in.
- Association rules on renting, move-in fees and parking.
- Utilities in your name, with readings noted on move-in.
- Your loan terms, if the lender has conditions on letting.
- An inventory of fittings, signed by both of you.
The paper, people, property test
- Paper. Right term, right duty, registered if over a year, and the deposit written in.
- People. Tenant ID checked, police informed, every adult occupant listed.
- Property. Khata, association approval, inventory and meter readings on day one.
Checklist
- Term decided: up to 11 months or longer
- Duty worked out on rent plus deposit
- Agreement on stamp paper or e-stamp of the right value
- Registered on Kaveri if over a year
- Tenant's ID and address proof copied
- Tenant information form submitted at the police station
- Association informed
- Inventory and meter readings signed
- CA asked about rent income and any TDS
CA note: Rent income and TDS have tax rules that depend on your situation. Check with a chartered accountant.
Related reading on this site: paying stamp duty with Karnataka Digital e-Stamp, how to register on Kaveri 2.0, and TDS when an NRI receives rent. Check a sale-rate figure, if you need one, with the stamp duty calculator.
Frequently asked questions
What is the stamp duty on a rental agreement in Karnataka?
For a home let for up to a year, 0.5% of the rent and deposit, capped at ₹500. For one to ten years, 1% of the average annual rent plus deposit, with no cap. Longer terms pay more. Leases to close family pay a fixed ₹5,000, ₹3,000 or ₹1,000 by location.
Is registration of a rental agreement compulsory in Karnataka?
It's compulsory for leases from year to year, for more than a year, or reserving a yearly rent, under section 17(1)(d) of the Registration Act. That's why 11-month agreements are common. You can still register a shorter one.
Does the security deposit count for stamp duty?
Yes. Article 30 counts "money advanced", which includes the security deposit whether it's refundable or adjusted against rent. Add it to the rent before working out the duty.
Why are rental agreements usually 11 months?
Because leases over a year must be registered and pay 1% duty with no cap, while a residential agreement up to a year pays at most ₹500 and needn't be registered. An 11-month term keeps it simple, at the cost of renewing more often.
How do I do tenant police verification in Bengaluru?
The official online tenant verification listing showed "Service Under Modification" on 19 Oct 2026. Submit the tenant information form at the police station covering your flat, with the tenant's ID, address proof and photos, and keep the acknowledgement.
Do I pay tax on rent from my flat?
Rent is taxable income, and some tenants paying high rent must deduct TDS. The rules changed with the Income-tax Act 2025, so ask a CA how they apply to you.
Talk it through with acre&key
If you'd like help planning to rent out a flat you're buying, book a consultation with acre&key.
Lawyer note: Lease terms, deposits and eviction are legal matters. This page is general information. Have a lawyer review the agreement.
References
Checked 19 Oct 2026.
- Karnataka Stamp Act 1957, Art. 30 (lease): https://dpal.karnataka.gov.in/storage/pdf-files/34%20of%201957%28E%29.pdf
- Registration Act 1908, s.17(1)(d).
- Seva Sindhu, Police - Tenant Verification listing: https://www.serviceonline.gov.in/applyService.do?backButtonUrl=viewAllServiceList.html&grievDefined=0&serviceId=29930001&tempId=&templStatus=
- Kaveri 2.0: https://kaveri.karnataka.gov.in/