NRIs cannot be physically present in India for each of their financial and legal transactions, and therefore, they need someone to act on their behalf in their absence to complete the formalities of the transactions. POA helps to achieve the same.

Power of Attorney is an authorisation in writing given by a person ( grantor/ donor/principal) to another person (attorney/agent) to act on his behalf. The person who can act on another’s behalf is called an attorney in -fact.

When POA is executed in favour of a person by NRI, he becomes the holder of the authority to act on his behalf. POA is required:

  • to do the necessary acts towards accomplishing any task in the absence of NRI
  • to complete certain transactions in time to avoid delay, e.g. taking possession of the flat, payment of taxes etc

The POA should be used when it is essential to use the same, and there is no other alternative.

Agency Relationship:        

POA creates a relationship of Principal-Agent between the parties. The acts of the agent bind Principal-Donor of the authority.  But an agent has to act within the scope of his authority. POA is given a strict interpretation, and no extra rights are construed. The acts which an agent is authorised to perform must be apparent in POA.

POA can be revoked once the task for which POA was executed has been accomplished or if the representative is misusing the power.

POA may cover any or all aspects of asset management. POA can be – General or Special Power of Attorney.

  • In General Power of Attorney, power is granted to do all the acts necessary concerning the subject matter.
  • In Special Power of Attorney, authority is assigned to perform specific tasks only.

POA can be used by NRIs to manage their assets in India in many ways like:

  • Collection of rent
  • Sale, Purchase, Mortgage, Lease, Settlement, Agreement or Registration of transfer deed
  • Banking transactions
  • Representation in Legal disputes
  • Managing affairs related to real estate – signing of contracts for renovation, taking possession from the builder etc.

Joint ownership:    

In case of joint ownership of property between NRI and Resident India, POA can be executed in favour of one owner to take important decisions and do the requisites concerning the subject matter of POA.

POA holder:    

POA can be given to relatives, blood relations and friends or even to a third party. In case of property matters, some states allow POA only in favour of blood relations.

Execution of POA:

If NRI is executing the POA   

  • While he is in India, POA is made on a non-judicial stamp paper and got notarized.
  • While he is abroad, then POA is made on plain paper (Indian Stamp paper not required) and got notarized there. It is sufficient for the countries signatory to the Hague Convention. But in India POA is given more weight if it is got attested through the Indian Embassy/ Consulate in the foreign country where NRI is residing.
  • If executed abroad, POA holder will have to get the POA registered in India in particular sub Registrar’s Office and stamp duty is to be paid.

 Registration of POA:    

POA concerning an immovable property which can confer title needs to be registered compulsorily, although, it is prudent to register any POA. In case of legal disputes, courts give more weight to registered documents.

Consulting a lawyer for the drafting of POA and for processing the same is always better to avoid future hassles.