Agreement for sale vs sale deed in India

The two documents side by side

What the law says about the agreement

• The Transfer of Property Act states that a contract for sale “does not, of itself, create any interest in or charge on such property” (s. 54).
• If a buyer has taken possession under a written contract and is willing to perform, the seller is barred from enforcing rights against the buyer, other than rights in the contract (s. 53A, part performance). This is a defence, not ownership.
• An unregistered document that must be registered cannot “affect any immovable property” and cannot be received as evidence of the transaction (Registration Act s. 49), except as evidence of a contract in a suit for specific performance or of a collateral transaction.
• Under RERA, the agreement must be in the form prescribed by the state and specify the project’s development particulars, the payment dates, the date of possession and the interest rates payable by each side in case of default (s. 13(2)). The promoter cannot cancel except under the agreement (s. 11(5)).
• RERA applies to promoters. A private resale between individuals is governed by the Transfer of Property Act and the state’s stamp and registration law.

What the law says about the sale deed

• It must be registered to transfer a home worth ₹100 or more (TPA s. 54; Registration Act s. 17(1)(b)).
• It must be presented within four months of execution (s. 23), with the property described so that it can be identified (s. 21), and the parties must appear before the registering officer (s. 34). Photographs and fingerprints of each buyer and seller are affixed (s. 32A). The steps are in property registration process.
• A registered document operates from the time it would have started to operate if no registration were required, not from registration (s. 47).
• For a new flat, the promoter must “execute a registered conveyance deed” along with the undivided proportionate title in the common areas (RERA s. 17(1)). In the absence of a local law this must happen within three months of the occupancy certificate (s. 17(1) proviso). See occupancy and completion certificate.

What the seller owes you

Unless the contract says otherwise, the seller must disclose any material defect in the property or in the title that the buyer cannot discover with ordinary care, answer relevant questions about the title, produce the title documents, and discharge existing encumbrances unless the property is sold subject to them (TPA s. 55(1)). See title search and encumbrance certificate.

Tax points tied to the dates

• TDS. If the price reaches ₹50 lakh the buyer deducts 1% from payments to a resident seller: TDS on property purchase.
• Stamp duty value on the agreement date. If the stamp duty value exceeds the price by more than the higher of ₹50,000 or 10% of the price, the excess is the buyer’s income (Income-tax Act 2025, s. 92(2)(m)(ii)). If the agreement date and registration date differ, the stamp duty value on the date of the agreement applies, provided at least part of the consideration was paid by a specified banking or online mode on or before that date (s. 92(4)(a)).

Which professional to consult

A property lawyer (advocate) enrolled with the State Bar Council should read the agreement before you sign and prepare or review the deed.