Security deposit rules for rented homes in India
Money · 2 min read · Updated
Deposit disputes are the most common fight at the end of a tenancy. A clear clause in the agreement prevents almost all of them.
How much is normal?
There is no single national cap that applies everywhere. The Model Tenancy Act, 2021, a central model law that states may adopt, suggests a limit of two months' rent for residential premises. Some states have their own rules, and in many cities the market practice is higher. Check your state's law and the figure your agreement uses.
When should it be returned?
Agree a timeline in writing. Our drafts say the deposit is returned within 30 days after the tenant vacates and hands back the property. A short, fixed deadline avoids open-ended delays.
What can be deducted?
Reasonable deductions are unpaid rent, unpaid utility bills, and damage beyond normal wear and tear. Painting that is only needed because of ordinary use should not be charged to the tenant. Ask for deductions to be itemised in writing with bills.
Protect yourself
Take dated photos or a video of the property at move-in and move-out. Record meter readings. Keep proof of the deposit payment, such as a bank transfer. Landlords should keep the same records.
Interest on deposits
Most agreements make the deposit interest-free. If you want interest, write the rate into the agreement.
Common questions
- Can a landlord keep the deposit for repainting?
- Only if the agreement allows it and the damage goes beyond normal wear and tear. Ask for the clause to be clear before signing.
- What if my deposit is not returned?
- Send a written notice with proof of the agreement and payment, then consider a legal notice and a consumer or civil remedy. A local lawyer can advise on the right forum.
General information, not legal advice. Laws and procedures vary by state and change over time. Check official sources or a local lawyer before you act.