Sale deed vs agreement to sell
An agreement to sell is only a promise to sell in the future. Section 54 of the Transfer of Property Act says such a contract does not, by itself, create any interest in the property. Ownership passes only when the registered sale deed is executed.
In Suraj Lamp & Industries v. State of Haryana (2011), the Supreme Court held that "sales" through a general power of attorney, agreement to sell and will do not transfer ownership. Only a registered conveyance does.
Checks to make before you sign
Most property disputes come from skipping basic title checks. Do these before you pay the balance amount.
- Trace the chain of title deeds for at least 30 years and match names, survey numbers and areas.
- Get an encumbrance certificate for the same period from the Sub-Registrar.
- Check the latest property tax receipt, mutation records and, for land, the revenue record (patta, 7/12, khatauni or RTC).
- For flats, check the approved building plan, occupancy/completion certificate, RERA registration and a society NOC.
- If a bank loan exists, get the loan closure letter and the original documents released before registration.
- Search court records for any pending suit or lis pendens on the property.
TDS on property purchase
When the sale consideration or the stamp duty value is ₹50 lakh or more, the buyer must deduct TDS at 1% (agricultural land is excluded). Since 1 October 2024 the higher of the two values is used, and the ₹50 lakh limit is tested on the total consideration even when there are several buyers or sellers.
Deposit the TDS with Form 26QB within 30 days from the end of the month in which it was deducted, and give the seller Form 16B. A higher rate applies if the seller has no valid PAN. If the seller is a non-resident, different rules apply and you need a TAN.
Registration process
Buy stamp paper or an e-stamp of the right value. Book a slot at the Sub-Registrar office. Both parties and two witnesses go with original ID, PAN and photographs. Many States take biometrics and record the session on video.
The deed must be presented within four months of execution (Section 23, Registration Act). Under Section 49, an unregistered sale deed cannot transfer title and cannot be used as evidence of the sale.
After registration
Collect the registered deed. Apply for mutation in municipal and revenue records, and transfer the electricity, water and society membership. Keep the TDS challan and Form 16B, because the seller needs them to claim credit and work out capital gains.
Frequently asked questions
Is registration of a sale deed compulsory?
Yes. A sale of immovable property worth ₹100 or more can be made only by a registered instrument (Section 54 TPA, Section 17(1)(b) Registration Act).
On what value is stamp duty paid?
On the higher of the sale price and the State guidance or circle value. Rates differ by State and sometimes by buyer category, such as women buyers.
When does the buyer deduct 1% TDS?
When the consideration or the stamp duty value is ₹50 lakh or more, for property other than agricultural land. The TDS is paid through Form 26QB.
Can I pay part of the price in cash?
Receiving ₹20,000 or more in cash for an immovable property transaction is prohibited and attracts penalty. Pay through banking channels and record each payment in the deed.
What is the time limit to register after signing?
Four months from the date of execution under Section 23 of the Registration Act.
Does a GPA or will sale transfer ownership?
No. The Supreme Court held in Suraj Lamp & Industries (2011) that only a registered sale deed transfers title.
Related formats
Official sources
- Transfer of Property Act, 1882 — India Code
- Registration Act, 1908 — India Code
- Indian Stamp Act, 1899 — India Code
- Income Tax Department — TDS on sale of property (Form 26QB)
- Specific Relief Act, 1963 — India Code
This page gives general information, not legal advice. Forms, fees and timelines are set by each State and can change — confirm on your State portal before applying.