In short
Decide the size, location and power you need, compare the asking rents of shops near the one you like, and visit at the hours your customers will come. Check that the person renting it out owns it or is allowed to rent it out, and that your kind of business is allowed there. Agree the rent, deposit, lock-in, notice period and yearly increase in writing. Most shop agreements in India run for 11 months because a lease of more than a year must be registered; in Maharashtra every leave and licence agreement must be registered. Rent on commercial property carries 18% GST, and a tenant paying more than ₹50,000 a month must deduct TDS.
Across 212 shops listed in India on ShopsOnRent with a size and rent, the middle half of owners ask ₹31 to ₹108 per sq ft a month. See rents by city.
1. Decide what you need
- Carpet area: the usable floor inside the walls. Owners often quote the larger "super built-up" area, which adds a share of walls, stairs and common areas; ask for both.
- Location and floor: ground floor shops on a main road with a wide front cost more and get more walk-in customers; upper floors suit offices, clinics and services.
- Power and water: the sanctioned electricity load (kW, single or three phase) decides whether you can run cooling, ovens or machines; food businesses need water and drainage.
- Use: some buildings and areas allow only certain trades. Food, liquor, chemicals and clinics need extra permissions.
2. Find shops and compare rents
Search the map of shops for rent, or post what you need so that owners nearby can contact you. Compare rents per sq ft rather than the monthly total, because sizes differ a lot. On ShopsOnRent you deal with the owner directly, so there is no brokerage.
3. Visit and check the shop and its papers
- Visit in daylight and again at the hours your customers will come; count how many people pass.
- Ask to see the title papers (sale deed or similar) and a recent property tax receipt, and match the owner's name with their ID. If someone else rents it out, ask for the owner's written permission.
- Check that the building may be used for business (approved plan or occupancy certificate), and the society's or the building's permission if it has rules about shops.
- Check the meter, the sanctioned load, the water connection, the shutter and the condition of the walls and floor; take dated photos.
- Ask whether the electricity, water and property tax bills are paid up to date.
4. Agree the terms
| Term | What to agree in writing |
|---|---|
| Rent | The monthly amount, the due date, and whether GST and maintenance are included |
| Security deposit | The amount, when it is refunded and what may be deducted from it |
| Period and lock-in | How long the agreement runs, and the months during which neither side may end it |
| Rent increase | By how much and how often (for example once a year) |
| Notice period | How many months' notice either side gives to leave |
| Maintenance and repairs | Who pays the society or mall charges, and who pays for which repairs |
| Fit-out time | Any rent-free weeks while you set up the shop |
| Use and signboard | The business you may run, and where your signboard may go |
There is no standard deposit, lock-in or increase that applies everywhere: compare with similar shops nearby and negotiate.
5. The agreement, stamp duty and registration
- Under the Registration Act, 1908, a lease of immovable property for more than one year, or from year to year, must be registered at the sub-registrar's office. That is why most shop agreements are written for 11 months and renewed.
- Maharashtra: every leave and licence agreement must be registered, whatever its length (Maharashtra Rent Control Act, 1999). Other states have their own rules, so check yours.
- Stamp duty is due on rent agreements in every state, at rates set by the state; it is usually paid by e-stamp paper or online. An agreement without enough stamp duty is hard to rely on in a dispute.
- Both sides sign every page, with two witnesses, and each keeps an original. Our free shop rent agreement generator gives you a draft to start from.
6. GST and TDS on the rent
GST
Renting out commercial property is taxed at 18% GST. A GST-registered owner adds it to the rent. If the owner is not registered and the tenant is, the tenant pays the GST under reverse charge (from 10 October 2024) and may be able to claim it back as input tax credit. Composition-scheme businesses should check the current rule with their accountant.
TDS
If the rent is more than ₹50,000 a month (the limit from 1 April 2025), the tenant deducts tax at source and pays it to the government: 10% for land or buildings under section 194-I, or 2% under section 194-IB for individuals and HUFs not under tax audit. The owner needs to give you their PAN.
7. Before you move in
- Get the licences your business needs: see our guide to licences and registrations.
- Pay rent by bank transfer and keep receipts; owners can use our free rent receipt generator, and the rent tracker keeps a record of payments.
- Note the meter readings and photograph the shop on the day you get the keys.
Checklist
- Carpet area measured, and the use allowed
- Owner's title papers, property tax receipt and ID seen
- Electricity load, water and bills checked
- Rent, deposit, lock-in, notice, increase and repairs agreed in writing
- Agreement stamped, and registered where required
- GST and TDS on the rent sorted out with your accountant
- Licences applied for
Questions people ask
Why are most shop rent agreements in India for 11 months?
Under the Registration Act, 1908, a lease for more than one year must be registered, which means stamp duty on the lease and a registration fee. An agreement for 11 months does not have to be registered under that Act, so many owners use 11-month agreements and renew them. Some states, such as Maharashtra, require every leave and licence agreement to be registered whatever its length.
Do I have to pay GST on shop rent?
Renting out commercial property is taxed at 18% GST. If the owner is registered for GST, the owner adds it to the rent. If the owner is not registered and you, the tenant, are registered, you pay the GST yourself under reverse charge (in force since 10 October 2024). Composition-scheme businesses should check the current rule with their accountant.
When must a tenant deduct TDS on shop rent?
When the rent is more than ₹50,000 a month (the limit since 1 April 2025). Businesses that must deduct TDS under section 194-I deduct 10% for land or buildings; individuals and HUFs not under tax audit deduct 2% under section 194-IB.
How much security deposit should I pay for a shop?
There is no fixed rule: it depends on the city, the location and the owner. Agree the amount, when it is refunded and what may be deducted from it, and write all three into the agreement before you pay.
What should I check before renting a shop?
That the person renting it out owns it or is allowed to (see the title papers and a recent property tax receipt), that the building and the local rules allow your kind of business, the carpet area, the electricity load and water, and the footfall at the times your customers will come.
Sources
- Registration Act, 1908, section 17(1)(d), and Transfer of Property Act, 1882, section 107: India Code
- Maharashtra Rent Control Act, 1999, section 55 (registration of leave and licence agreements); online registration: IGR Maharashtra
- GST on renting of commercial property and reverse charge: Notification No. 09/2024-Central Tax (Rate), CBIC
- TDS on rent, sections 194-I and 194-IB (limits as changed by the Finance Act, 2025): Income Tax Department
- E-stamp paper: SHCIL e-stamping (in the states that use it)