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A factory grants its watchman a lease of staff quarters under the Transfer of Property Act, 1882. The…

Under section 105 of the Transfer of Property Act, 1882, periodic consideration for the right to enjoy leased property is rent. Deducting the agreed amount from salary is a…

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A factory grants its watchman a lease of staff quarters under the Transfer of Property Act, 1882. The lease provides for a fixed monthly amount as consideration for the right to occupy, paid by deduction from salary. What is the character of that amount under section 105?

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Answer and explanation

Correct answer A

Under section 105 of the Transfer of Property Act, 1882, periodic consideration for the right to enjoy leased property is rent. Deducting the agreed amount from salary is a method of payment. The facts specify a lease and an agreed periodic amount for occupation.

Option feedback

Option A

The amount is periodic consideration rendered by the lessee for the right to enjoy the leased premises.

Option B

Nothing makes the amount refundable or a security deposit.

Option C

A lease premium is the price paid for the transfer, whereas this amount is periodic consideration for enjoyment.

Option D

The facts specify a lease transferring a right to enjoy the premises. A charge for permission under a service licence would describe a different arrangement.

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