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What are the laws/regulations in India for security deposits taken while renting/leasing a residential property in India

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Security deposit rules in India for residential renting. Explore regulations, rights, and tenant protections.

In India, laws and regulations exist to protect tenants and govern the handling of security deposits taken while renting or leasing a residential property. It's essential to understand your rights and the applicable regulations regarding security deposits. Here's a simplified overview:

Limit on Security Deposit:

The maximum limit for security deposits is typically limited to two to three months' rent, as per the local state laws. Landlords are not allowed to demand a higher amount as a security deposit.

Deposit Refund:

At the end of the tenancy, the landlord is required to refund the security deposit to the tenant. However, this is subject to deductions for any unpaid rent, utility bills, or damages to the property beyond normal wear and tear. The landlord must provide an itemized list of deductions and return the remaining amount to the tenant within a reasonable time frame.


It is crucial for tenants to insist on proper documentation for the security deposit. This includes a receipt or acknowledgment from the landlord indicating the amount of the deposit and the purpose for which it has been collected. Both the tenant and the landlord should retain a copy of this document.

Interest on Security Deposit:

Some states in India, such as Maharashtra, have regulations that require landlords to pay interest on the security deposit. The interest rate and calculation methods may vary from state to state. It's important to check the local laws to determine whether interest is applicable and the specific requirements.

Maintenance and Repairs:

The security deposit is primarily meant to cover any damages beyond normal wear and tear. The landlord is responsible for maintaining the property and should not deduct from the security deposit for routine maintenance or repairs.

Dispute Resolution:

If there is a disagreement between the tenant and the landlord regarding the security deposit, either party can approach the Rent Authority or a Small Causes Court, depending on the local jurisdiction, to resolve the dispute. It is advisable to maintain proper documentation, including photographs of the property's condition at the time of moving in and moving out, to support your case, if needed.