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Power of Attorney

What is a Power of Attorney?

Power of attorney (POA) is an important legal document that allows a person to appoint another person or organization to manage his/her property (Power of attorney for property), medical affairs, and finances on his behalf in his absence. Under this arrangement, the person who authorizes the other person to act on her behalf is called the principal or donor or grantor. The person authorized is called the agent or power of attorney agent.

Depending on the terms and conditions, the authorized agent can either have extensive or limited authority to make legal decisions related to the property (Power of attorney for property), medical affairs, and finances.

Types of Power of Attorney (POA)

There are four types of POAs based on the degree of responsibility delegated.

  • Conventional Power of Attorney
  • Based on the degree of responsibilities given, this instrument is also known as the General Power of Attorney (GPA) or limited power of attorney. This is limited only to a specific responsibility and exists for a specified time. The PoA agent is allowed to make personal and business decisions under this facility.

    E.g.The grantor can bestow the power to a PoA agent to sign a sale deed when he/she is out of town or country.

  • Durable Power of Attorney
  • Durable POA is designed for a lifetime. Under this, the PoA agent has the power to take decisions even if the grantor becomes incapacitated/unfit to take decisions. Generally, a durable POA continues until the grantor's death or unless the grantor cancels the POA.

    E.g. The grantor can appoint an agent to manage his investment portfolio.

  • Springing Power of Attorney
  • For a specific event, date or condition, the springing POA is used and also when the grantor becomes incapacitated.

    For example, If a military man is disabled or deployed overseas, he can appoint a PoA agent to handle financial affairs.

  • Medical Power of Attorney
  • Medical POA comes under both springing POA and durable POA. This instrument is generally invoked for healthcare decisions. It must be highlighted that medical POA will not be triggered until the grantor is conscious and of sound mind and body.

    E.g., The PoA agent can pay the grantor's medical bill. However, he is not authorized to make a decision about taking off the life support system if the need arises.

Stamp Duty for Power of Attorney

If a General Power of Attorney (GPA) is executed in the name of the father, mother, brother, daughter, grandson, sister, wife, husband, son, granddaughter or any close relative, without any consideration, then Stamp duty will be Rs. 500/- is only applicable for registration.

In case the General Power of Attorney (GPA) is given to a person other than a close relative for consideration, then stamp duty is chargeable as per the market value of the property concerned or the consideration value, whichever is higher.

In addition to the stamp charges, a registration charge of Rs 100 is applicable if the Power of Attorney (PoA) is conferred without consideration in the name of the father, son, daughter, mother, brother, grandson, sister, wife, husband, or granddaughter or a near relative.

In any other case, registration charges are charged at the rate of Rs 10 per Rs 1000 with a minimum of Rs 100 and a maximum levy of Rs 30,000 on the market value of the property concerned or consideration value whichever is greater.

How do you get a Power of Attorney done?

The POA has to be executed at the office of the sub-registrar that lies within the jurisdiction of the person giving the power. If the grantor resides abroad, the POA should be attested by the Indian consulate in that country and must be used within three months from the date of execution.

A person who is staying abroad (NRI) and wants to buy a property (Power of attorney for property) in India can execute POA using the following methods:

  • Legalization: Through this, the signature of the judge/notary before whom the POA is signed/executed has to be authenticated by the accredited representative of the Indian Embassy/Consulate. Moreover, this POA has to be stamped in India within three months from the date of receipt. The stamp duty on PoA is paid when the document is represented in India for registration. The stamp duty on PoA is paid as per Section 2(17), read with Schedule-I of the Indian Stamp Act, 1899
  • Apostillisation: Apostille is a certificate which confirms and verifies the signature/seal of the person who authenticated the document (PoA in this case), and this must be in compliance with Indian laws like the Indian Registration Act, 1908, and the Power of Attorney (PoA) Act, 1882. The POA executed outside India is proven through an apostillisation procedure which is governed by the Hague Convention, 1961.