Agreement to Sell: Drafting, Stamp Duty & Registration
An agreement to sell is the written contract that fixes the price, payment schedule and handover date before the sale deed. It does not transfer ownership. We draft it for your review, work out stamp duty and TDS, and coordinate registration, with a practising advocate vetting it where you want one.
What it is
An agreement to sell is a contract in which the seller promises to sell a property and the buyer promises to buy it on stated terms, usually with an advance paid now and the balance at the sale deed. It is also called an agreement for sale or ATS. It is a promise about the future. Nothing changes hands today except money. Picture a couple in Ballabgarh paying an advance on a flat: until the deed is registered, the flat is still the seller’s.
Under Section 54 of the Transfer of Property Act, 1882, a contract for sale does not by itself create any interest in the property. Ownership of property worth ₹100 or more passes only by a registered sale deed. Our sale deed registration page covers that final step. This page covers the agreement that comes before it.
Who it applies to
Buyers paying an advance
If you are handing over a token or advance, the agreement records what you paid, what you are owed if the deal fails and when the sale deed will be signed.
Sellers with conditions
If you need time to clear a loan, get a society NOC or finish construction, the agreement fixes those conditions and the date by which they must be met.
Builder-floor and plot deals
Resale flats, builder floors, plots and shops often move on an agreement first, with the deed after a loan sanction or clearance.
Why it matters
It fixes the deal
Price, payment schedule, handover date and what happens on default are written down, which stops a later change of mind.
It gives you something to enforce
A buyer who is ready and willing to perform can ask a court for specific performance. A vague or unsigned understanding is hard to enforce.
It controls cost and tax
How possession is described changes the stamp duty, and advance payments can trigger TDS. Getting this right early avoids a surprise at the sub-registrar’s office. Our TDS filing team handles the deduction and challan.
Documents required
From the seller
- Title deed and chain of earlier documents
- Property tax receipt, society or builder NOC
- PAN, Aadhaar and address proof
From the buyer
- PAN, Aadhaar and address proof
- Payment proof for the advance
- Loan sanction letter, if a loan is involved
For the agreement
- Property description with boundaries or flat number
- Agreed price, payment schedule and handover date
- Two witnesses with ID proof
How it works
Review the title first
We go through the seller’s papers and flag gaps, such as a missing earlier deed or a mortgage, before you pay anything.
Draft clear terms
We draft the agreement for your review: parties, price, advance, schedule, possession, default and refund, and the date of the sale deed.
Get stamp duty and TDS right
We work out the stamp duty on the e-stamp or e-GRAS route and, where applicable, the buyer’s TDS on each payment.
Sign, register and head for the deed
The parties sign before witnesses. We coordinate registration where it is needed and then the sale deed.
Stamp duty and registration
The rule that catches people is possession. If the agreement says possession has been handed over, the document is treated like a conveyance for stamp duty. In Bikram Singh v. Charanjit Singh (11 April 2022), the Punjab and Haryana High Court held that a registrable agreement reciting delivery of possession must be stamped, and it upheld impounding with a ten-fold penalty.
Section 17(1A) of the Registration Act, 1908, effective 24 September 2001, makes registration important for a buyer who wants the protection of Section 53A of the Transfer of Property Act, the part-performance doctrine. A registered agreement still does not transfer title.
| Situation | Stamp duty position |
|---|---|
| Agreement without possession | Lower, agreement-level duty. Check your state. |
| Agreement with possession, Haryana | Treated as a conveyance. Sale deed rates are urban 7% for men and 5% for women, rural 5% and 3%. |
| Agreement with possession, Delhi | Sub-Registrar refers it for conveyance duty. Delhi rates are 6% for men and 4% for women. |
Timelines
Drafting
Two to three working days once the title papers and price terms are in hand.
Time to the sale deed
Fixed by the agreement. Delay can cost you the right to enforce it, so we write a clear date.
Suit for specific performance
Three years from the date fixed for performance under the Limitation Act, 1963. Act well before that.
What happens if you get it wrong
Under-stamped agreement
A document that needed conveyance duty but was stamped as an agreement can be impounded, with duty and a penalty to pay, as the 2022 High Court case shows.
Weak protection
An unregistered agreement may not carry the Section 53A shield. Courts have, in some cases, still allowed specific performance, but you should not rely on that.
TDS and tax errors
The buyer must deduct 1% TDS under section 393 of the Income-tax Act, 2025 where the consideration or stamp duty value is ₹50 lakh or more, and 20% if the seller’s PAN is missing.
Frequently asked questions
What is an agreement to sell?
It is a contract where the seller agrees to sell and the buyer agrees to buy a property on set terms, normally with an advance now and the balance at the sale deed. It does not transfer ownership. Only a registered sale deed does. We draft it for your review and coordinate the stamping and registration.
Is an agreement to sell the same as a sale deed?
No. The agreement is a promise to sell in future. The sale deed is the conveyance that transfers ownership, and for property of ₹100 or more it must be registered under Section 54 of the Transfer of Property Act, 1882. After the agreement, you still need the deed.
Is registration of an agreement to sell compulsory?
It depends. Since 24 September 2001, Section 17(1A) of the Registration Act ties registration to the protection of Section 53A where possession is given. Courts have taken different views on non-registration. Registering is the safer course, and we tell you when your deal needs it.
What stamp duty applies to an agreement to sell in Haryana?
If the agreement recites delivery of possession, it is stamped like a conveyance. In 2022 the Punjab and Haryana High Court upheld that position and a ten-fold penalty on an under-stamped document. Sale deed rates are urban 7% for men and 5% for women. We check the exact duty before signing.
What is the position in Delhi?
If possession is mentioned, the Sub-Registrar refers the agreement to the Collector of Stamps for conveyance duty, which in Delhi is 6% for men and 4% for women on a sale deed. Without possession, the agreement carries a much lower duty. We confirm current rates before you sign.
Does TDS apply on the advance paid under an agreement?
Yes, where the total consideration or the stamp duty value is ₹50 lakh or more. Section 393 of the Income-tax Act, 2025 requires the buyer to deduct 1%, and TDS applies when the amount is credited or paid, whichever is earlier. A missing PAN raises it to 20%. We prepare the payment and return.
Can the buyer enforce the agreement in court?
Yes, if the buyer was ready and willing to perform and the agreement is valid. A suit for specific performance must be filed within three years of the date fixed for performance. Court filings are signed and argued by a practising advocate. We prepare the papers.
Can I rely on an agreement, power of attorney and will to buy property?
No. The Supreme Court in Suraj Lamp and Industries v. State of Haryana (2011) held that an agreement to sell with a power of attorney and will does not transfer title. Always complete a registered sale deed. We can arrange the deed.
Can the agreement be cancelled?
Only on the terms it contains or by mutual consent in writing. If the seller defaults, the buyer can seek refund or specific performance. If the buyer defaults, the seller may forfeit a reasonable sum. We write these clauses clearly so each side knows its position.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Ready to begin?
Send us the property papers and the price terms. We will draft the agreement for your review and tell you the stamp duty and TDS before you sign.