Latest Supreme Court Judgement on Power of Attorney 2021
Power of Attorney or POA is a legal authority given by a person to another person to act as an agent of the former and undertake particular activities as authorized by him. A power of attorney (POA) has been discussed in two laws in India, namely “The Powers of Attorney Act 1882” and “The Indian Stamp Act 1899.” There are mainly two kinds of POA, one is General POA which gives the right to perform routine tasks on behalf of the POA issuer, and Another one is special POA which grants the rights to perform some specific tasks assigned by the issuer. To be legally enforceable, both the general POA and special POA are required to be registered.
Buyers and sellers frequently enter into an extensive three-step strategy to carry out the selling transaction to circumvent the law and evade taxes on real estate transactions:
- A sale agreement (different from a sale document) is drafted, outlining the terms of the transaction.
- The seller creates an irrevocable Power of Attorney, putting the buyer in complete control of the property.
- The seller then leaves this property to the buyer through a will.
The Supreme court has ruled out a recent judgment regarding the use of General POA for the sale of the property. It states that property transactions carried out using the POA will not have legal backing in the eye of law.
The recent Judgement explained that the Supreme court (SC) decision would be applicable on transactions concerning property transfers retrospectively. However, this judgment will not affect the transactions of property sales and POA executed in bonafide cases. Also, SC stated that municipalities should not make any adjustments to the records of property transfers made using general POA in the past, citing this judgment on the request of any person.
E Stamp paper for Power of Attorney
E-Stamp Paper is a computer-based mechanism for payment of Stamp Duty to the government in a secure manner. The Central Government has replaced the current non-judicial stamp paper with E-Stamp Paper, which is significantly more trustworthy and secure.
By switching from stamp paper to e-stamp paper, there is no longer any danger or forgery. Payment of stamp duty is significant as the delay in payment of the duty will attract penalties. Obtaining stamp paper physically involved many risks like forged stamp papers, the exorbitant amount charged by few people and many others.
Now, E-Stamp paper can be purchased by anyone online without any intermediary. A power of attorney attracts stamp duty payable on the same, and the same needs to be registered. The stamp duty charges differ from state to state. The stamp duty applicable on a sale deed is based on the property’s market value in transfer.
Registration of Power of Attorney for Sale of Property
The State Government was facing revenue losses due to many people transferring their property by executing a POA. Thereby avoiding payment of requisite stamp duty calculated based on the property’s market value to the government.
To eliminate the flaws and prevent criminal activities of transferring property without the payment of the required stamp duty, the government came up with the legislation of transferring property only after the Power of Attorney registration was executed to sell the property. The importance of the Power of Attorney for property registration can, therefore, be understood. Registration of power of attorney was brought within the eye of the law to avoid revenue losses and avoid its usage for fraudulent practices.
Indian Embassy Power of Attorney Sample
https://www.indianembassyusa.gov.in/pdf/MISC-Sep-21-2020.pdf
Power of Attorney Registration in India
A power of attorney is not required to be registered unless it generates an effect on real property, such as a lien in the donee’s name. The Right of Attorney should only be authenticated by a Sub-Registrar, where Registration Act 1908 is in force. Otherwise, it must be properly attested by a notary, particularly if the agent is given the power to sell land.
A power of attorney must be filed if it is for an immovable property worth more than Rs100. The deed of power of attorney is authenticated when it is registered. Stamp duty must have been paid for the Power of Attorney to be registered and acknowledged as legal evidence in court.
The POA cannot be used as evidence in a legal dispute if stamp duty is not paid, and the person who signs the instrument can be penalised up to ten times the original stamp duty. An NRI’s power of attorney can be used to sell or buy property in India and for banking purposes, investment, rent, etc.
The signature of the person making the POA must be certified by the Indian Embassy of that country, and the Power of Attorney must be executed on stamp paper if required in that country.
Therefore, the process of registration of Power of Attorney for property registration is as follows –
- On an INR 100 stamp paper, outline the terms of the Power of Attorney. The PoA is now referred to as a simple Power of Attorney.
- Visit the Registrar’s Office (also known as the Sub-Office) in your residence area.
- The registrar’s office would require two witnesses to sign the Power of Attorney in front of them.
- Carry original documents that have been self-attested, such as address evidence, as well as photocopies.
- In the government records, the registrar will keep an image of you, the Power of Attorney holder, and the witnesses.
- The registrar will preserve a copy of the Power of Attorney in government records and supply you with one stamped by their office.
Power of Attorney Registration Online
The process of registration of Power of Attorney registration process for online is very easy. It can be performed by anyone who wants to register it, by sitting at home by following the below steps –
Step 1– You should first populate the details in the draft form to the form given on the website prescribed for registration online.
Step 2– Mention the state and location from where you are filing the form online.
Step 3– According to the State you belong to, the site will calculate the payment, and you need to make that payment online.
Step 4– Lastly, you need to print the document you have filled online and register it.
General Power of Attorney Registration Fee
A General Power of Attorney (GPA) is a legal document in which one party, the Principal, authorises another party, the agent or attorney, to act on their behalf. The attorney can represent the client in several disciplines relating to the immovable property, including the sale of the property, the presentation of documents to the Sub-Registrar office for registration, and the maintenance of the property, among others.
The General Power of Attorney registration varies in respect of each state. Two witnesses, along with the documents to be registered, must be present at the time of submission of documents to the registration authority.
The fees for registration of Power of Attorney vary in respect of each state. The fees for registration of Power of Attorney and the stamp duty for registration vary according to each state. For example, in TN, Registration fees for registering Power of Attorney are divided into
- For consideration
- Without consideration
- For family members
- For others, there are different rates for registration.
Similarly, in other states, various other criteria exist according to which registration fees will be levied.
Special Power of Attorney Registration
A special power of attorney is a legal document that specifies the scope of authority granted by the principal to an agent. An agent is given the right to act on behalf of the principal to make certain legal or financial choices under a special power of attorney. The Attorney should only be granted the Special Power if they need to do a specific task.
The nature of the task that the Attorney is responsible for should be described very carefully and clearly. If the subject matter of the Special Power of Attorney deed involves immovable property valued at Rs.100 or more, the deed must be registered with a Sub-Registrar office where the property is located.
According to state regulations, appropriate registration fees must be paid. Registration and Stamp duty also varies for special Power of Attorney registration from state to state. Notarising a deed is not the same as registering it. Notarisation is just a confirmation that the deed was written and signed by the person who has the authority to provide that right. As a result, if the Rules require registration, the document should be registered only at a Sub-Registrar office.
Why is Registration of Power of Attorney Compulsory?
A Power of Attorney for property registration or Registration of POA has become mandatory to bring them under the scanner of registering authorities’ jurisdiction. This will result in full realisation of Stamp duty to respective States and result in lesser cases being filed for property disputes.
Nowadays, many suits and proceedings are arising as a result of property transfer across various States. Deals made through POAs are based on notarised documentation. This is thought to be sufficient to permit a person or an enterprise to use the immovable property, but neither can be called an owner in the traditional sense. This is done to avoid stamp duty, which must be paid according to the prescribed rates when the sale deed is registered.
Also, the documents related to transfer can only be registered in the State where the property is located. Also, the documents after registration will be open to the public for inspection to promote transparency.
Power of Attorney Stamp Duty & Registration Fees
The Power of Attorney registration for stamp duty is a paid process. One needs to complete the payment for the Power of Attorney registration process to begin. However, the need for stamp duty on the general or enduring POA is not necessary.
The registration fee for stamp duty for a POA is Rs 100.
Will Registration at Home
Will is a legal document that specifies how property and other assets will be awarded after the executor of the will passes away. It is the only legal document that establishes who is a person’s heir and how much each individual will get. It becomes operational only after the executor’s death and cannot be utilised against them while they are still alive.
Normally registration of the will is not compulsory. However, a will is generally signed at home/office in the presence of witnesses and registration of the same can be during the person’s existence after it has been signed by the person making it. The Testator is the person whose will is being made. Registration of will at home involves the following steps.
Step 1– You have to go to the Sub Registrar’s office first.
Step 2– An request must be submitted from your side to the effect that the registration authority will be required to visit the home in case of exceptional circumstances.
Step 3– Witnesses to the will should be ready. One of the witnesses should be a medical practitioner.
Step 4– An certificate by the practitioner to the effect that the testator will fit at the time of making the will.
Step 5– An Advocate needs to approach with the will made for registration of the same.
The registration charges will also apply for registration of the will.
Will Registration Fees
The registration of will may be done with the help of an advocate or at the Sub-Registrar’s office if done on its own. However, the contents are not validated; only its genuineness is ensured. Any person competent can register a will either during his lifetime or after his death will be registered.
There is no stamp duty for registration of the will. However nominal registration fee is charged, which differs across the states. The fee for the registration of the will is Rs.100/-.
The registration of will is usually done at the Sub-Registrar’s office. If the will is updated after it is registered, then the updated will can be registered by paying the registration fees. Generally, a will is registered to avoid disputes between the legal heir and their share. In case you want to specify the proportion of assets/ money to be entrusted to your spouse or an instruction that only such percentage share should only go to your kids and balance to be held in trust, then such instructions can be executed only if a proper will has been made by you beforehand. So drafting will ensure your property/assets are dispersed in the manner as desired by you.
Registration of Will after Death
Dying Intestate refers to a situation where the expired person will have made no. In such cases, the assets and liabilities will be divided according to the Religious acts under which the deceased person belongs. Also, in case of no will, there may be legal disputes arising between the legal heirs of the deceased person. The person who ensures that the instructions specified in the will are carried or not is called the executor.
There is no compulsion to appoint an executor for a will, and they can be a relative or an outsider like an advocate or a trusted person of the testator. The Registration of the will after death is necessary if the original gets ruined due to unfortunate circumstances. A copy of such a will can be obtained from the registrar, and since a registered will is legally enforceable in the court of law, having such documents can be helpful.
Will Registration Compulsory or Not
The registration of the will is not compulsory. However, the registration of will is made to retain the genuineness of the already written will and avoid disputes among the legal heirs of the testator. Also, to avoid duplication or tampering of the will, that will be registered.
There is no specific period prescribed in the law for the registration of the will. Therefore, the will can be registered either before death or after the testator’s death to make it legally enforceable. Also, once the will is registered, then the copy of the will is not shown to every person but to the person who has the evidence that he has the right to see the will and the executor of the will.
You Might Also Like
Frequently Asked Questions (FAQ’s)
How Power of Attorney Helps NRIs to Manage their Property
An NRI can delegate any person to act on behalf of him as an agent to discharge his responsibility concerning property sale or any other activities as authorised by him to do. An NRI might not be present physically everywhere in case they have many properties held across the world. In such cases, they can execute a POA in favour of the person who shall act as their agent in executing the tasks assigned through POA for the NRI. Thereby, the NRI can manage the property transfers from the place they are present and execute the activities they intend to by an agent acting on behalf of the NRI at such place.
Should power of attorney be registered?
There was no compulsion to register POA executed for the sale of the property. Still, due to increasing people using POA to avoid payment of Stamp duty and registration fees for the transfer of property and to avoid payment of capital gain taxes on the sale of property, the SC, in its recent judgment, has made that sale through POA is valid in the eyes of the law. Going according to the judgment of SC, it has now been necessary to compulsorily register POA when it is executed for the sale of a property. POA is required to be compulsorily registered if it is issued after 01/12/2012.
How do I register a power of attorney?
The POA must be filed with the self-regulatory organisation (SRO) in whose jurisdictional area the property, in whole or in part, is located. It can also be registered in the SRO, where the Principal lives regularly. POAs registered in other states can likewise be used for document registration and execution. However, before proceeding with the registration, the Registrar must obtain written confirmation from the concerned SRO.
Is unregistered power of attorney valid?
The POA executed for the sale of immovable property is not valid if it is not a registered POA. An unregistered POA doesn’t give you the power to deal with the transfer of the property. So to validly transfer the property, one must have a registered POA to execute the same on behalf of the person authorising the person to sell the property.
How do I register a power of attorney in India?
Power of Attorney is registered in India by delivering the requisite documents to the Sub-Registrar and the witnesses and payment of prescribed stamp duty and registration fee.
What is the procedure to get a POA registered in India?
Stamp duty needs to be paid for making registering the POA to make it as legal evidence in case of any proceedings. The power of attorney registration process involves the following –
Step 1– First draft a power of attorney and decide whether it is a general or special POA with the help of a legal advisor in India.
Step 2– Deliver the POA along with the requisite documents to the sub-registrar for registration.
Step 3– Then, the POA is required to be attested before the Registrar in the presence of 2 witnesses.
Does the power of attorney require to be stamped?
A POA is required to be stamped, and payment of the stamp fees differs from place to place. Generally, the stamp fees are Rs.100 and registration fees are Rs.100. In case issued for consideration, the stamp duty payable in respect of immovable property will be based on the property’s market value.
What documents are needed to create a gift deed?
The documents required for the creation of the gift deed are –
1. Original gift documents
2. Original sale agreement
3. Any lien/charge certificate
4. Pan number of both parties
5. 2 witnesses
6. Any other document as required
Is power of attorney a legal document?
Yes. It is a legal document that gives a right to the agent/ person who acts on behalf of the person authorising to perform specific acts or sale of immovable property. It can be a general POA or a special POA. Special POA is an instrument to perform only special actions.
How to make Indian power of attorney in Dubai?
Following is the steps to make Indian POA in Dubai:
Step 1– Prepare a draft POA and affix passport size images on the last printed page.
Step 2– Authorise the POA and notarise it in front of the notary authorities and Indian embassies in Dubai.
Step 3– Send the attested POA to your agent in India.
Step 4– The agent should take along with him the attested POA, one photocopy and other prescribed documents to the Registrar office in the district.
Step 5– The Registrar will verify the same and stamp the attested POA with his authorisation.
How to register land in Tamil Nadu?
The steps for physically registering the land with the registrar is as follows:
Step 1– First, obtain the certificate of title from the registrar to ensure that the property belongs to the purchaser.
Step 2– Stamp paper to be purchased for registration will be decided based on land guideline value to register the sale agreement. The documentation process for the sale agreement should also be complete.
Step 3– The appointment for registration of the sale must be booked with the registrar and seller. The buyer and witnesses should go to the registrar’s office to complete the registration on the scheduled date.
Step 4– The copy of the registered document will be made available to the parties.
Until now, there is no procedure for online registration of land with the registrar.
How to transfer a property from my brother to me?
The manner of transferring your brother’s property to me is by execution of a gift deed by your brother in my favour. The stamp duty required to be paid for the registration is based on the property’s market value, and the document is required to be exchanged in the presence of at least 2 witnesses.
I need to register a property in India. What is to be done?
The following steps are required to be followed:
Step 1– Obtain a certificate of title to ensure the property is in the name of the seller.
Step 2– Calculation of the value of the property to be purchased.
Step 3– Procurement of stamp paper based on the market value of the property.
Step 4– Documentation of the sale document for registration.
Step 5– Estimation, payment of stamp duty and registration fee for the registration of property
Step 6– Sub-registrar for registering the documents of the property
