Yadav, who was arrested by Punjab Police on Sunday, was presented in the court in the Muslim-dominated town Malerkotla, nearly 100 km from Chandigarh.
The court on Monday sent Yadav to two-day police custody.
The Punjab Police had arrested the AAP legislator from Mehrauli area while addressing the media at his Delhi office. The arrest came after the Malerkotla court issued arrest warrants for Yadav.
The police had questioned Yadav for over eight hours on July 9 in connection with the Quran desecration incident on June 24.
The AAP lawmaker was booked as a “mastermind” in the Quran sacrilege conspiracy following alleged revelations by one of the accused arrested in the case.
Main accused Vijay Kumar, who claimed he was paid Rs 1 crore by Yadav for the act, recorded his statement last week before a magistrate.
The Sangrur police had charged Vijay Kumar, Gaurav and Nand Kishore with desecration of the Quran and said they belonged to the right-wing Hindu organisation Vishwa Hindu Parishad.
Yadav claimed that he had nothing to do with the incident and was being falsely implicated for political reasons in view of assembly elections in Punjab which are likely to be held in February next year.
The AAP is posing a tough challenge to the ruling Shiromani Akali Dal-Bharatiya Janata Party alliance and the opposition Congress in the run-up to the assembly polls.