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

Short answer: when you take bayana (token or advance money) for land or a house in Patna, take it only by bank, from the buyer's own account. Accepting ₹20,000 or more in cash as an advance for a property deal is barred under the Income-tax Act 2025, and the penalty, equal to the amount, falls on you. Sign a written agreement (ikrarnama) with all co-sharers that sets the price, payment dates, a registry deadline and what happens to the bayana if either side backs out. Register it (2% + ₹1,000) if you want it to carry full weight, and compulsorily if you hand over possession on it. Keep possession and your original papers until the full price is in your account.

Bayana is where most Patna land deals either become solid or start going wrong. For a buyer it is a risk of losing money; for a seller it is a risk of the land being "blocked" for months by a buyer who never completes, or of a dispute over who backed out. Doing it the right way protects you on both counts.

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

Section 185 of the Income-tax Act 2025 says no person may accept a "specified sum", defined in Section 189(c) as any money receivable, as an advance or otherwise, in relation to the transfer of immovable property, whether or not the transfer takes place, other than by account-payee cheque, account-payee draft or bank transfer, if it is ₹20,000 or more (including earlier unpaid amounts from the same person).

• Penalty: under Section 450, 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.
• Refund too: if you have to return the bayana, a refund of ₹20,000 or more must also go by cheque, draft or bank transfer (Section 188).

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

How much bayana should a seller take?

There is no legal figure. Our view as an advisor: enough to show the buyer is serious, linked to a short, fixed deadline for the registry. A large advance with no date only keeps your land locked while the buyer looks for money. A small bayana with a 30–60 day registry date, and a clear clause on what happens if the date is missed, works better for an honest seller.

What should the bayana agreement (ikrarnama) say?

Should the agreement be registered in Bihar?

• Cost: the Registration Department's table lists an agreement relating to the sale of 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: under Section 17(1A) of the Registration Act, 1908, an agreement for sale under which the buyer takes or keeps possession in part performance (Section 53A of the Transfer of Property Act) must be registered, or it does not get that protection.
• An unregistered agreement still counts as evidence of the contract in a suit for specific performance (proviso to Section 49), but a registered one is far stronger and shows up in an Encumbrance Certificate.

For an ordinary short deal with no possession, many sellers use a written, stamped and signed agreement and go straight to 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 what your agreement says. If it clearly states that a stated earnest amount will be kept if the buyer fails to pay by the date, 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; if there is a dispute, take legal advice before deciding.

Tax: a forfeited advance received during negotiations, where the deal does not go through, is taxed as "income from other sources" in that year (Income-tax Act 2025, Section 92(2)(h)). Show it in your return. It is then not reduced from your cost when you finally sell (Section 81).

Lock in today's MVR for your tax

In Bihar, MVR now rises 5% every financial year. Under Section 78(1)(a) of the Income-tax Act 2025, if the price is fixed in an agreement and part of it is received by bank on or before the agreement date, the stamp duty value on the agreement date can be used for your capital gains, instead of the value on the registry date. 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 (Transfer of Property Act, Section 55(3)).
• Proposes a "power of attorney sale" instead of a sale deed. 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.
• 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.

Bayana for a land sale: frequently asked questions

1. Can a seller take bayana in cash?

   Not ₹20,000 or more. Section 185 of the Income-tax Act 2025 bars accepting any advance for the transfer of immovable property of ₹20,000 or more other than by account-payee cheque, draft or bank transfer, whether or not the sale finally happens. The penalty under Section 450 equals the amount.

2. Is a bayana agreement valid without registration?

   Yes, as a contract, and it can be used as evidence in a suit for specific performance. But if possession is given under it, Section 17(1A) of the Registration Act requires it to be registered. In Bihar, registering an agreement for sale costs 2% stamp duty and a ₹1,000 fee.

3. If the buyer backs out, can I keep the token money?

   If your agreement clearly says a stated earnest amount is kept when the buyer fails to pay by the date, generally yes, for a reasonable amount. Without such a clause, or for a large advance, you may have to refund it. A forfeited advance is taxable as income from other sources.

4. How much bayana is normal for land in Patna?

   There is no legal rule. As advisors we suggest an amount that shows the buyer is serious, tied to a short registry deadline (30–60 days), rather than a large advance with no date.

5. Should I give possession after taking bayana?

   No. Give possession on the registry day, after the full price is received. Possession on an agreement gives the buyer protection under Section 53A of the Transfer of Property Act (once the agreement is registered), so if the buyer then fails to pay, getting the land back is slow and hard.

6. Does the agreement date matter for my tax?

   Yes. If part of the price is received by bank on or before the agreement date, the stamp duty value on that date can be used for your capital gains under Section 78(1)(a), which helps when MVR rises every April.

This article was written on 22 October 2026 from 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. This is general information, not legal or tax advice.