Token money (bayana) in a Delhi property deal
Token money is the amount a buyer pays to reserve a property while the papers are checked. Buyer and seller agree the amount for the deal. Put 3 things in writing: the amount, the condition that it is subject to the documents, and the refund if a document fails. Pay by cheque or bank transfer against a receipt.
· By Raghav Chopra, founder, in South Delhi real estate since 2010
How much token is normal?
The amount is agreed between the buyer and the seller. It varies with the size of the deal and how many buyers are interested, and Raghav Chopra tells a buyer what is usual for a particular deal before the price is settled.
Pay an amount you can afford to have tied up for a few weeks, and never pay more than the agreement to sell later requires.
What should the token receipt say?
It should name the buyer and the seller, describe the property exactly, state the price agreed and the amount paid, and give the date and the mode of payment. It should say that the token is subject to the documents being found in order.
Both sides should sign it, and you should keep a copy.
When is token money refundable?
In Raghav Chopra's deals the token is subject to the documents. The buyer's side checks the title, ownership, sanctioned plan, completion certificate and parking papers after the token, and if a document is missing or wrong the token is refundable.
Write that condition into the receipt. Without it, getting the money back can mean a dispute.
What are the cash payment limits?
The Income Tax Act restricts cash payments in property deals, and a cash token also leaves no proof of payment. Your CA confirms the current rule.
Pay by cheque or bank transfer, and keep the bank record with the receipt.
Token, earnest money and full payment compared
| Stage | What it is | Typical timing | Paperwork |
|---|---|---|---|
| Token (bayana) | Reserves the property while papers are checked | On agreeing the price | Signed receipt, subject to documents |
| Agreement to sell payment | A significant part of the price, paid once papers are confirmed | About 2 weeks after the token | Agreement to sell |
| Balance and registration | The rest of the price, paid as the sale deed is registered | Up to 3 months after the agreement for a ready property | Registered sale deed |
Timings are as Raghav Chopra sees them for a ready property. Your agreement sets the dates that bind you.
Frequently asked questions
Is token money the same as earnest money?
In everyday Delhi usage people use the words loosely, but they mark different stages. The token reserves the property while papers are checked. The larger payment at the agreement to sell is the stronger commitment. Be clear in writing which amount you are paying and on what condition.
Can the seller keep the token if I back out?
That depends on what the receipt and agreement say. If the token is subject to the documents and a document fails, it is refundable. If you withdraw without reason after the papers pass, the seller may claim to keep it, so read the conditions before you pay.
Should I pay the token in cash?
No. Pay by cheque or bank transfer so there is a record, and because the Income Tax Act restricts cash in property transactions. A cash payment also gives you little proof if the seller later denies receiving it, and it can create a tax problem for both sides.
Does Ultra hold the token?
No. The token goes from the buyer to the seller against a written receipt. Raghav Chopra arranges the meeting where the price is settled and the token is exchanged, and makes sure the document check follows, but the money does not pass through Ultra.
This is general information, not legal or tax advice. Confirm with your CA or lawyer before acting.
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