If I have to return the bayana, can I refund it in cash?

Not ₹20,000 or more. A refund of that size must also go by account-payee cheque, draft or bank transfer.

Is a kept (forfeited) bayana taxed?

Yes. Say the deal falls through and you keep an advance received during negotiations. It is taxed as "income from other sources" in that year. Show it in your return. It is then not reduced from your cost when you finally sell.

The buyer wants a "power of attorney sale". Is that safe?

No. The Supreme Court (Suraj Lamp & Industries v. State of Haryana, 2011) held that sales by GPA, agreement and will do not transfer title. You stay the owner on paper, and the liability stays with you.

Why not give possession after taking bayana?

Possession on an agreement gives the buyer "part performance" protection once the agreement is registered. If the buyer then fails to pay, getting the land back is slow and hard. Give possession on the registry day, after the full price is received.

Taking Bayana in Patna: Seller's Guide to Token Money 2026

Quick answer

Take bayana only by bank, from the buyer's own account.

A cash advance of ₹20,000 or more is barred, with a penalty equal to the amount on whoever takes it.
Sign a written agreement with every co-sharer: price, dates, registry deadline, and what happens to the bayana if a side backs out.
Registering it costs 2% + ₹1,000. It is compulsory if you hand over possession on it.

But keep possession and original papers until you are fully paid.

📑 Jump to a section (8)

Never take bayana in cash: the ₹20,000 rule
How much bayana should a seller take?
What should the bayana agreement (ikrarnama) say?
Should the agreement be registered in Bihar?
Buyer backs out: can you keep the bayana?
Lock in today's MVR for your tax
Warning signs from a buyer at bayana time
Questions & answers

Never take bayana in cash: the ₹20,000 rule

The Income-tax Act 2025 bars taking ₹20,000 or more for a land transfer except by account-payee cheque, draft or bank transfer. This covers advances too, whether or not the sale finally happens. Earlier unpaid amounts from the same person count towards the ₹20,000.

Penalty: equal to the amount accepted. On a ₹2 lakh cash bayana, a ₹2 lakh penalty.
On the seller: the person who takes the money is the one penalised.

Take it from the buyer's own account (not a friend's or a broker's) into yours. Write the UTR or cheque number in the agreement.

How much bayana should a seller take?

There is no legal figure. Our view: enough to show the buyer is serious, tied to a short, fixed registry deadline. A large advance with no date only locks your land while the buyer looks for money. A small bayana with a 30–60 day registry date works better, with a clear clause for a missed date.

What should the bayana agreement (ikrarnama) say?

Clause	Why it matters to the seller
All sellers named and signing, every co-sharer included	One brother's signature on joint land creates a dispute, not a deal
Property: mauza, thana no., khata, khesra, area in kattha-dhur and decimal, boundaries, jamabandi number	Exactly what will go into the sale deed; no later argument about "which plot"
Total price, bayana received (with UTR), balance and its due date	Proof of what was paid and what is owed
Registry deadline	If the buyer doesn't pay by then, you are free
Who pays stamp duty, registration fee and deed charges	Avoids a fight on registry day (usually the buyer in Patna)
Buyer's default: what part of the bayana is kept	Write a reasonable figure; vague wording is hard to enforce
Seller's default (e.g. a paper defect you didn't disclose): refund	Fairness, and a buyer is more willing to sign
Possession only on full payment / registry	Never give possession on bayana alone
1% TDS if the deal is ₹50 lakh or more; PAN of both sides	So your TDS credit is not lost
Your disclosure of anything known: pending mutation, a co-sharer issue, a road issue	The law makes the seller disclose known material defects; doing it in writing protects you later

Should the agreement be registered in Bihar?

Cost: the Registration Department's table lists an agreement to sell immovable property at 2% stamp duty and a ₹1,000 registration fee. Ask the sub-registry office how this duty is treated when the sale deed is registered.
When it is compulsory: if the buyer takes or keeps possession under the agreement, it must be registered. Otherwise the buyer's "part performance" protection does not apply.
An unregistered agreement still counts as evidence of the contract in a suit for specific performance. But a registered one is far stronger and shows up in an Encumbrance Certificate.

For a short deal with no possession, many sellers sign a written, stamped agreement. They register the sale deed within weeks. For a larger deal, a long gap before registry, or any possession, register it.

Buyer backs out: can you keep the bayana?

That depends on your agreement. Say it clearly states an earnest amount is kept if the buyer misses the date. Then a seller is generally on firm ground for a reasonable amount. A large "advance" described loosely, with no forfeiture clause, may have to be refunded. Write the clause clearly at the start. In a dispute, take legal advice before deciding.

Lock in today's MVR for your tax

In Bihar, MVR now rises 5% every financial year. Fix the price in an agreement and receive part by bank on or before that date. Then the stamp duty value on the agreement date can be used for your capital gains. Otherwise the registry-date value applies. A cash bayana loses this benefit. More on price: fair price from MVR.

Warning signs from a buyer at bayana time

Wants to pay from someone else's account, or in cash "to avoid tax".
Wants possession, a key or construction rights on the bayana.
Asks for your original deeds at bayana time. Give photocopies; originals go to the buyer after full payment.
Proposes a "power of attorney sale" instead of a sale deed (see the FAQ below).
Asks you to sign blank papers or a deed draft you haven't read.

What should you do? (Our advice)

Papers first, bayana second. Fix the jamabandi before you take anyone's money: fix your land papers.
Bank only, buyer's own account, UTR in the agreement.
Written agreement signed by every co-sharer, with a registry date and a clear forfeiture/refund clause.
Register it if the deal is large, the gap is long, or possession is involved.
No possession and no original papers until the full price is in your account. The full sale process: how to sell land in Patna.

Taking bayana? Get the agreement and papers checked first

Bayana for a land sale: frequently asked questions

If I have to return the bayana, can I refund it in cash?
Not ₹20,000 or more. A refund of that size must also go by account-payee cheque, draft or bank transfer.
Is a kept (forfeited) bayana taxed?
Yes. Say the deal falls through and you keep an advance received during negotiations. It is taxed as "income from other sources" in that year. Show it in your return. It is then not reduced from your cost when you finally sell.
The buyer wants a "power of attorney sale". Is that safe?
No. The Supreme Court (Suraj Lamp & Industries v. State of Haryana, 2011) held that sales by GPA, agreement and will do not transfer title. You stay the owner on paper, and the liability stays with you.
Why not give possession after taking bayana?
Possession on an agreement gives the buyer "part performance" protection once the agreement is registered. If the buyer then fails to pay, getting the land back is slow and hard. Give possession on the registry day, after the full price is received.

Written on 22 October 2026. Sources: the Income-tax Act 2025, the Registration Act 1908, the Transfer of Property Act 1882 and the Bihar Registration Department's stamp duty table. Whether a bayana can be kept depends on the facts and the agreement; take legal advice in a dispute.

General information from official sources, checked on 29 October 2026. Rules change — confirm with the registry or circle office before paying.