Leave and license agreement

Income Tax Act does not require you to register a Leave & license agreement. It requires to disclose terms of the agreement and offer the house property income to tax. Many people do not register the agreement since they want to save stamp duty payable to respective state governments. Please note that registration of such agreements under the Stamp Acts of various states is mandatory and these non-registration practices followed by people are illegal under the Stamp Act, but not under Income Tax Act.

Another advantage of registration of an agreement is that you can claim rent unpaid by a tenat or legally enforce vacating the house after his/ her license period is over, if the tenant does not follow terms of the agreement.