The car in which the 57- year-old actor, director was travelling hit a roadside tree near Shahkot in Nakodar area of the district around 1 am, Bhatti's associate Vinod Sharma said.
Bhatti's son Jasraj, who was driving the car, and film's heroine Surilie Gautam were injured and rushed to a hospital in Jalandhar.
Sharma said that Bhatti had been travelling during past few days for the promotion of his new film.
The cremation is expected to take place later this evening after his body is brought here after completion of various legal formalities, including post-mortem, Sharma said.
Bhatti leaves behind his wife Savita, a son and a daughter.