Bhatti's pyre was lit by his son Jasraj, who was himself injured in the accident but was discharged from hospital in the afternoon.
Hundreds of mourners from diverse fields attended the cremation. These included politicians, leading celebrities of the Punjabi film and theatre industry and scores of friends of Bhatti. Earlier, a large number of mourners reached his Sector 19 residence.
"The king of comedy has left everyone in tears. He did not deserve this," one of his close associates said at the cremation ground.
Bhatti's Honda Accord car had rammed into a tree along the highway while he was on his way to Jalandhar for the promotion of his latest film "Power Cut". Police said that the accident happened around 3 a.m. while Bhatti was on his way to Jalandhar from Bathinda.
Bhatti, 57, was taken to a hospital in Jalandhar after the accident where doctors declared him dead. He sustained head injuries in the accident.
Jasraj and the film's heroine Surilie Gautam and publicist Navneet Joshi were also injured. They were give treatment in a hospital in Jalandhar, 150 km from state capital Chandigarh.
Bhatti's latest film "Power Cut", which he had produced and directed, was to be released Friday. The film was to launch his son Jasraj.
Sources close to Bhatti said that he was on a 40-day tour for the promotion of his film. The tour was to end Thursday with a media conference in Jalandhar.
Bhatti was a popular face on television and in Bollywood films with his comedy shows and appearances. His TV shows "Ulta-Pulta" and "Flop Show" had entertained TV audiences in the late 1980s and 1990s.
He also directed a film "Mahaul Theek Hai", a satire on the police, administration and society, in 1999.
Bhatti, perhaps the most famous Sikh comedian, acted in several Bollywood films.
Bhatti is survived by wife Savita Bhatti, herself an actor, son Jasraj and daughter Raabiya.
