Have you ever wondered how NRIs are able to manage their properties in India without ever visiting the country?
In this blog post, we are going to help you learn everything you need to know about power of attorney, along with its incredible usefulness.
What is A Power of Attorney?
For those who may not be aware, power of attorney or POA is an official document that gives a person listed as the principal or donor the right to choose another individual to represent them. The selected representative is often known as an attorney, donee, or agent.
People in India utilise the power of attorney to appoint a legal representative to help them with the smooth execution of transactions in case they are buying a house, taking out a mortgage, or selling a property.
So, how does a power of attorney prove helpful for Non-Resident Indians or NRIs?
POA comes in handy if an NRI buys a place in India but cannot visit the country to carry out the registration process. In such a situation, the NRI can utilise a registered power of attorney to ask a trustworthy friend or family member to handle the legal obligations on their behalf.
Types of Power of Attorney
There are three types of power of attorneys that prove valuable for NRIs. Here’s a list to help you understand more about them;
- Special Power of Attorney:
This exists for specific transactions and becomes invalid after serving its sole purpose.
- Standard Power of Attorney:
With a standard or general power of attorney, the agent is free to make decisions on behalf of the principal without any limitations.
- Durable Power of Attorney:
A durable POA remains valid until it is revoked by the principal. The attorney is allowed to take over the entire management of the property in case the principal becomes mentally challenged or passes away.
It’s pretty common for NRIs to utilise a special power of attorney to sell or purchase a property in India through someone else. What’s important to note here is that a person who uses general power of attorney should possess the registered sale deed as well as the physical property. Plus, the POA needs to be registered in India after paying the stamp duty.
Uses of Power of Attorney
NRIs manage properties in India with the power of attorney because it is the ideal tool for overseas Indians who have valuable possessions and cannot visit the country for different reasons. Below are mentioned some of the main usages of POAs:
- Take out a mortgage
- Rent out a property
- Buy or sell a property
- Exchange assets
- Finance the acquisition of an asset through a loan
- Manage and overcome any disputes
- Pay taxes
How Can NRIs Execute POA From Overseas?
If an NRI is unable to come to India, they can execute a POA by going to the Indian Embassy or Consulate in the country where they are living. Here’s how NRI POAs are executed;
- For starters, a qualified professional drafts a POA.
- Next, you have to get it notarized by Notary Public with two witnesses.
- Now you have two options; either choose legalisation or apostilization. Once you have completed the second step, the notary stamp has to be verified by the duly accredited representative of the Indian Embassy or Consulate. After legalisation, you have three months to get your NRI POA stamped in India. Moreover, the stamp duty is payable as per the Indian Stamp Act at the time of registration in India.
As far as apostilization is concerned, you need to get your POA apostilled by relevant state officials if it is meant for commercial purposes. An apostilled copy is a certificate to verify that your notarized POA is valid. Having an apostille POA means you do not have to get it attested in India, but you are required to pay the stamp duty on it.
- After getting your POA authenticated, you can send it to your attorney in India.
- In this step, your attorney is responsible for getting your power of attorney registered at a sub-registrar office by paying the necessary registration charges. The fees may be different for every state.
- Finally, your NRI power of attorney can now be used for the desired purposes.
Revoking A Power of Attorney
There are various reasons for revoking a power of attorney. For instance, it can become feasible for the principal owner to manage the operations concerning the property by themselves after a while. Moreover, power of attorney can be revoked if the principal thinks the agent is abusing the authority granted to them.
Power of attorney is revoked in the same manner as it was given. Therefore, if it was initially registered with the sub-registrar, you have to ask the same office to cancel the POA. Moreover, everyone involved in the execution of the POA should be properly informed when it is revoked.
It should be noted that power of attorney can only be revoked once. Some POAs, such as the special POA, are automatically revoked after the transaction they were designed for is completed.
Power of attorney or POA is not just for NRIs. People living in India who own several properties and holdings also use power of attorney to execute transactions if they cannot be present due to any reason.
But it goes without saying that NRIs find the usage of power of attorney particularly beneficial as they are able to finalise deals without ever having to spend money on expensive cross-country travelling. We hope you found the information on all about how NRIs are able to manage their properties in India.
Contact ACE Group for more information, and secure your chance at investing in the best Noida Expressway property before it’s too late.
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