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What is Power of Attorney?
Power of Attorney (POA) is a legal document through which one delegate certain execution powers to another person. The person who delegates such powers is known as the principal, grantor or donor, and the person to whom such powers are delegated, is known as POA holder, agent, donee or attorney. The POA lists out the powers that a person delegates to a POA holder and for which he/she authorized the POA holder to act on his/her behalf.
The POA holder can be a friend, family member or an acquaintance, since when the principal is unable to perform some act himself, he would trust a close person to do it.
Contents of Power of Attorney
A well drafted POA shall contain the following:-
- Details of the person who makes the POA, i.e. the Principal.
- Details of the person to whom the power is granted, i.e. the Attorney.
- The reason for granting the POA
- The date and place of making the POA and effective date
- The date of termination of the POA (if it is limited by time). However, if no time is specified mention whether the POA is durable or non-durable
Laws governing the Power of Attorney in India
The different laws which govern various aspects of Power of Attorney (POA) in India are as follows:
- Indian Evidence Act, 1872
- The Indian Contract Act, 1872
- Stamp Duty Act (State specific)
- Registration Act, 1908
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Frequently Asked Question
What are some of the common uses of POA?
POAs can be executed for a variety of purposes, here are examples of some of the most common purposes it is executed:-
- When an NRI purchases or has a property in India, but is unable to visit India on a frequent basis, he executes a POA in favor of someone else to deal with such property.
- When an elder member of the family becomes incapacitated due to old age ailments, he/she executes General Power of Attorney (GPA) in favor of their children or other close family members to deal with their assets.
- In case of companies, which are facing litigation in different parts of the country, it executes Special Power of Attorney (SPA) in favor of its employees working in such cities where it faces litigation.
Difference between General Power of Attorney and Special Power of Attorney?
- A general power of attorney (GPA) gives broad authorizations to the agent. The agent may be able to make all of the medical decisions, legal choices, or financial or business decisions.
- However, a special power of attorney narrows what choices the agent can make. For example, SPA executed for filing court cases.
- The main difference between the two, is that in GPA, broad powers are given to the holder, however, in SPA, specific and narrow powers are granted.
How to make Power of Attorney legally enforceable?
- Drafting:- Draft a POA by stating the necessary particulars and authorizations.
- Sign:- The POA must be signed by the principal.
- Stamping:- The POA must be stamped according to the relevant stamp duty act.
Is it mandatory to stamp POA?
Under section 48 of schedule 1 of the ‘Indian Stamp Act 1899’, the power of attorney is chargeable. And it is mandatory to pay stamp duty by the principal/grantor in the jurisdictional registrar’s office.
Stamp duty charges vary from one state to another.
Can I sell my immovable property through GPA?
Buying a property through General Power of Attorney is a commonly followed route of transacting in Indian real estate. However, as per an order issued by the Supreme Court of India in 2011, transferring a property through GPA is invalid.
Can PoA be cancelled or revoked?
Yes, it can be revoked by the “Revocation of Power of Attorney”
After executing POA, does my rights cease to exist?
No. You can manage your own rights even after you appoint a POA holder. This arrangement does not transfer powers unilaterally to the agent. It only shares such powers.
What will happen if my POA holder dies?
All powers granted to the Attorney are naturally revoked by law. The POA holder will not be able to act on behalf of the grantor. Additionally, if there was a will in place, it will come into effect.
What will happen if my POA grantor dies?
In such cases, the POA becomes revoked
What will happen if my POA holder becomes of unsound mind?
In such cases as well, the POA becomes revoked.
Can companies or corporations execute POA?
Yes. In fact, the companies usually execute POAs to their agents. For example, in case of companies, which are facing litigation in different parts of the country, it executes Special Power of Attorney (SPA) in favor of its employees working in such cities where it faces litigation.
In case of companies, POA is granted by its authorized representative.
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Power of Attorney
₹4999₹ 14999 (60% Off) ₹9000 Save
₹7999₹12999 ₹5000 Save