How Power of Attorney Helps NRIs To Manage Their Property In India?

Every NRI or prospective NRIs must have heard people advising them about the Power of Attorney (POA). It is a powerful instrument for NRIs living abroad and managing their assets in India. NRIs should have adequate knowledge about the legalities involved in the regulation of power of attorney in matters where they have properties and financials in India.

In simple words, the Power of Attorney is the delegation of an individual’s power to another trusted person. POA is a principal-legal representative relationship where the principal grants rights to legal representation to make decisions in the absence of the principal. It can be for a monetary transaction or for physical care. POA differs based on requirements, it depends on the type of matter involved and one must apply caution in assigning power of attorney.

Process of executing a Power of Attorney:

  • An NRI needs to get the desired matter of the POA drafted and typed on non-judicial stamp paper.
  • He is required to visit the Sub-Registrar’s office along with a legal representative and two witnesses.
  • All the persons accompanying the NRI should carry valid identity proof. Photocopy of the POA, along with the original copy, must also be taken along.
  • After all the proceedings, the NRI needs to collect the registered POA on the due date from the Sub-Registrar’s office.
  • NRIs can also grant Special Power of Attorney to an individual from their country of residence by getting it attested by Notary. However, in the case of General Power of Attorney with the power to sell, the same has to be attested by the Indian Embassy.

Although POA is a legal and accurate way of managing property, finances, and taxations; there are numerous cases where fabrication and misuse of POA have invoked civil and criminal liabilities. And, such cases are extremely tricky to handle in court. It is advised to follow a few steps to avoid any legal proceedings:-

    1. General POA needs to be registered. An NRI executing POA in India cannot declare that he is a resident of India. It will make the document null and void.
    2. Both parties of POA should be legally capable of making them, which means they must be of sound mind and should not be minors.
    3. NRIs should provide the address proof of their resident country.
    4. POA holder also needs to keep in mind that he cannot open a bank account, they can operate only on the designated bank accounts. Also, the repatriation of funds outside of India is not allowed except for the principal account holder.
    5. Once the required matter is closed, it is advised to formally revoke the Power Of Attorney.

Power of Attorney is not a complete delegation of the original rights, but only authority is given to someone to act on the principal’s behalf. An NRI can delegate any reliable person to discharge his responsibility legally. Power of Attorney (PoA) can do a favor to them by introducing relief and comfort in settling down property disputes.

NRIs can use POA in property matters for the following purposes:

  • Manage and settle property disputes.
  • Mortgage, sell, lease, rent collection, borrow, etc.
  • Perform acts as required by the banks, enter into contracts, deal with bonds, etc.

It is important to note, that it is illegal to use a POA to avoid payment of stamp duty while selling a property.