A commercial lease sets rent, deposit, lock-in period, escalation, fit-out and maintenance responsibilities for business premises. Leases over 11 months must be registered. GST at 18% applies to commercial rent, and where an unregistered landlord rents commercial property to a GST-registered tenant, the tenant pays GST under reverse charge.
Essential clauses
- Premises, area and permitted use
- Rent, deposit and escalation
- Lock-in and termination
- Fit-outs and restoration
- Maintenance and common area charges
- Subletting and assignment
Tax points
- GST on rent and input tax credit for tenants
- TDS on rent by tenants above thresholds
Registration and stamp duty
Register long leases and pay stamp duty based on rent and term per state law.
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Get expert help →Negotiation tips
Seek rent-free fit-out periods, cap escalations and clarify exit terms.
Frequently asked questions
Can a tenant claim GST paid on rent?
Yes, as input tax credit if used for business and conditions are met.
Is TDS applicable on commercial rent?
Yes, tenants deduct TDS under the Income Tax Act above thresholds.
What is a lock-in period?
A period during which neither party can terminate without penalty.
Can a commercial lease be for 11 months?
Yes, but longer registered leases give better security for businesses.
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