Important information about Power of Attorney for NRIs

Important Information About Power Of Attorney For NRIs

Managing a property in one's native country might be difficult for Non-Resident Indians (NRIs). A Power of Attorney (POA) can be created to avoid the distance from becoming a barrier. Better property management and convenience of doing business are made possible by it. When drafting a power of attorney, you should bear in mind.

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A power of attorney (POA) is a legal document that appoints an attorney or person to act on behalf of the principal, who is the owner of the property. In the absence of the owner, the paper gives the attorney authority to make significant choices. Here, the attorney may be anyone the main chooses, including a friend, relative, real estate lawyer, or property manager. The arrangement works best for Non-Resident Indians (NRIs) who are unable to physically manage their real estate in their place of origin.

Typically, there are three types of power of attorneys (POAs). These include: 

Special power of attorney

The rights of the attorney are restricted to one specific purpose under such a contract.

Task-specific Special POA expires when the task is finished. For example, if the POA includes the right to rent, the attorney's authority is restricted to renting out the property exclusively.



General power of attorney

A general POA gives the attorney extensive authority to handle important issues while the principle is away. These abilities include managing money, purchasing insurance, writing checks, filing taxes, resolving disputes, and buying and selling real estate

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Consistent power of attorney

Unless the principal expressly revokes it, the durable POA is still in effect for the duration of the principal's life. However, a particular phrase that states that the attorney's power would remain valid even if the principal becomes physically or mentally incompetent can be included in the POA if the principal has a medical condition.

Information that NRIs should consider before executing a power of attorney 

Execution

The POA can be executed without the NRI principle being present in India. Through the Indian embassy, a POA can be registered in the nation where the beneficiary resides. Both legalization and apostalization are options for POA registration outside of India.



Legalisation

A POA must be notarized by an authorized officer of the Indian Consulate or Embassy, in accordance with Section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948. Additionally, the POA must be stamped within three months of the day it was received in India. When the deed is brought for registration in India, stamp duty is charged.

The Indian Stamp Act of 1899's Section 2(17) Schedule-I specifies how the payment would be paid.



Apostilization

A POA may also be carried out outside of India through the apostalization procedure, which is controlled by the 1961 Hague Convention. Here, an apostille certificate is needed to confirm and validate the signer's signature on the deed. The Power of Attorney Act of 1882 and other Indian legislation, such as the Indian Registration Act of 1908, should be followed by the deed. Additionally, stamp duty is incurred when the document is received.

How to execute POA in India?

"An NRI in India may execute the POA at the Sub-office. Registrar's However, the POA must be written on paper with a non-judicial stamp of Rs 100. The deed would also need to be signed by two attorneys and two witnesses. All participants should have current IDs with photos. The POA takes 4-5 days to come after the deed is completed, according to Bipin Tiwari, a property consultant with NRI Realtors.



Registration

According to the Indian Registration Act of 1908, the POA's registration is not required.

However, if a power of attorney is used to sell an immovable asset, it must be registered, according to a Supreme Court of India decision. The sub-office registrar's located in the county where the attorney resides is where the deed should be registered, according to Tiwari.



Revocation

A POA is only effective for as long as the principle is alive. However, if necessary, the principal may revoke or rescind it at any time. Additionally, the POA is void if the principal is deemed insane or insolvent. The POA cancellation process is identical to the execution process. The deed may be revoked in the presence of two witnesses at the Sub-office.

Registrars

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Accountability

The principal would not be liable if a dispute arose as a result of fraud committed by the attorney. However, if it becomes necessary, the principal will have to demonstrate their ignorance of the situation in court.

Furthermore, it is significant to remember that the stamp duty levied in India varies depending on the state and the attorney chosen. So, keep up with the standards governing powers of attorney. For instance, depending on the attorney, the stamp charge for a basic POA varies greatly. The stamp duty in this case is Rs 500 if the attorney is a close relative,

such as a spouse, father, mother, wife, child, or brother. On the other hand, if the POA is granted to someone other than the close family, a different stamp duty is levied. Depending on which is higher, it is either the consideration or the property's market worth.

In general, using a power of attorney to administer an estate in India is simple and straightforward for NRIs. Regulating the attorney's authority is essential, particularly if it is a property manager or a distant relative.

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