Agreement to sell in Punjab and Chandigarh: bayana, stamp duty and registration
An agreement to sell (iqrarnama, or bayana agreement) fixes the price, the payment schedule, the date for the sale deed and what happens to the bayana if either side backs out; it does not transfer ownership, which only a registered sale deed does.
Its stamp duty is an “Ask us” in both places: Punjab’s department table has no row for it, and the published Chandigarh rate is 5% of the token or earnest money, not the price, which we are still confirming, so budget for 6% until the Sub-Registrar confirms it.
Registration is not compulsory as a rule, but register the agreement the moment the buyer is put in possession under it.
Checked on against the Punjab Revenue Department’s published fee table and the Chandigarh Administration’s published table of stamp duty and registration fees, as our agreement to sell page states them. Neither table carries a notification number on its face, and Punjab’s table has no line for this paper, so confirm the figure at the Sub-Registrar’s counter before you buy stamp. Guide updated .
What is an agreement to sell, and what does it not do?
Buyer and seller use an agreement to sell once they have agreed a deal on a house, plot, shop or land and want the sauda in writing before the registry. Our free agreement to sell fixes the price and payment schedule, records the seller’s promises about the title, sets the date for the sale deed, and says what happens to the bayana if either side backs out. A bank usually asks to see it signed before it sanctions a home loan.
It does not transfer ownership: a contract for the sale of immovable property creates no interest in the property at all (section 54 of the Transfer of Property Act, 1882). Only a registered sale deed does that. The agreement is the contract a court enforces if the seller changes their mind after taking the bayana.
When is it the wrong paper?
- Buying an under-construction flat or a plot from a builder or coloniser: a promoter must use its own prescribed, registered agreement for sale.
- Holding an allotment letter from GMADA, GLADA, PUDA or another authority: read the allotment conditions first, as the transfer needs that authority’s permission too.
- Paying a small token before the price is known: use the shorter token advance receipt.
- An agreement plus a general power of attorney plus a will, to pass property without paying duty: the Supreme Court condemned it in Suraj Lamp and Industries v State of Haryana (2012), and it will not give the buyer title.
What is the stamp duty on an agreement to sell?
Ask the Sub-Registrar before you buy the paper. In Chandigarh, if you register it, the fee is 1% of the token or earnest money, up to Rs 10,000 (confirm the cap), plus a Rs 20 pasting fee. Buy the stamp on or before the day you sign: an under-stamped agreement cannot be used in evidence until the shortfall is paid with a penalty of up to ten times its amount.
There is no concession for a woman buyer: Punjab’s women’s rate is for a conveyance only, and neither table distinguishes by gender here. If possession passes, the Collector may treat the agreement as in substance a conveyance, so ask the Sub-Registrar before you sign. See our Punjab and Chandigarh stamp duty guides.
Does an agreement to sell have to be registered?
Not as a rule: the Registration Act does not make it compulsorily registrable, because it creates no interest in the property. Three things change that.
- Possession. If the buyer is put in kabza under the agreement, only a registered agreement protects that possession (section 53A of the Transfer of Property Act). Register it.
- A promoter as seller in Punjab: the agreement in the prescribed form must be presented for registration.
- Choice. A registered agreement sits on the Sub-Registrar’s index, where a later buyer searching the record will find it.
An unregistered agreement that should have been registered is shut out as evidence, though it may still prove the contract in a suit for specific performance. To register, present it within four months of signing; the Registrar may accept it within a further four months on a fine of up to ten times the fee, and after eight months it cannot be registered at all.
Who signs, and do you need witnesses or a notary?
- Every co-owner must sign. If one owner does not sign, the buyer has not bought the property.
- A seller signing through an attorney needs a registered power of attorney that expressly authorises the sale and the receipt of the price; a notarised one is not enough.
- No notary is required by law; it is worth doing if the agreement is not going for registration, but it is not registration and does not cure short stamping.
- Sign before two witnesses anyway. In Chandigarh the first must be a Lambardar, Sarpanch or Member Panchayat for a rural deed, or a councillor, gazetted officer or advocate; in Punjab, ask the tehsil office whom it accepts.
What do you need before you sign?
- PAN and address for the buyer, the seller and every co-owner who is also selling
- A full description of the property, with area and boundaries, and its Punjab revenue record or Chandigarh Estate Office or Housing Board particulars
- The agreed price, the bayana already paid, and how the balance will be paid
- The Collector rate, so the sale deed duty can be estimated now, and the date by which the sale deed must be registered
- Two witnesses
What mistakes do people make?
- Treating the agreement as if it transfers ownership.
- Handing over possession without registering the agreement.
- Budgeting Chandigarh duty on the full price instead of the earnest money actually paid.
- Paying bayana before checking the fard or allotment file and that every owner signs.
Questions people ask
Does an agreement to sell transfer ownership of the property?
No. Section 54 of the Transfer of Property Act, 1882 says a contract for the sale of immovable property creates no interest in the property at all. Ownership moves only on a registered sale deed; the agreement is the contract a court will enforce, not the conveyance.
What happens to the bayana if the buyer backs out of the deal?
The agreement settles that in advance: its earnest money clause says whether, and how much of, the bayana the seller may keep if the buyer defaults, and separately what the seller owes the buyer if the seller backs out. Write the figure down rather than relying on an oral understanding once a dispute has started.
What is the stamp duty on an agreement to sell in Punjab and Chandigarh?
It is an “Ask us” in both. Punjab’s table has no row for it, so ask the Sub-Registrar what Article 5 comes to. In Chandigarh the published rate is 5% of the token or earnest money actually paid, not the full price, but portals quote 6%, so budget for 6% until the Sub-Registrar confirms it.
Does an agreement to sell need to be registered?
Generally not. The exception that matters: if the buyer is put into possession under the agreement, only a registered agreement then protects that possession, so register it in that situation.
Is there a stamp duty concession for a woman buyer on an agreement to sell?
Not on the published material for Punjab or Chandigarh. Neither government table draws a distinction by the buyer’s gender for this paper, and the female rates quoted online could not be traced to any notification. Pay the published rate until the Sub-Registrar confirms otherwise in writing.
This guide explains the rules as our document pages state them. It is not legal advice about your own situation; for that, speak to somebody who has heard your facts.