UNDERSTANDING POWER OF ATTORNEY (POA) IN PROPERTY TRANSACTIONS
Before addressing your question, it’s essential to differentiate between
blood relatives and
non-blood relatives, as this classification significantly impacts stamp duty charges when executing a Power of Attorney (POA).
CLASSIFICATION OF RELATIVES FOR STAMP DUTY PURPOSES
Blood Relatives (Close Family Members):
- Father
- Mother
- Brother
- Sister
- Husband
- Wife
- Son
- Daughter
Non-Blood Relatives:
- In-laws
- Uncle
- Aunt
- Cousin
- Nephew
- Niece
- Advocate
- Agent
- Broker
- Any person other than immediate family members
Note:
This classification is based on regulations applicable in
Karnataka. Other states may have different definitions—some may consider in-laws, nephews, and nieces as blood relatives. Therefore, it's advisable to consult your local authority or legal expert to confirm the applicable classification in your state.
TYPES OF POWER OF ATTORNEY IN PROPERTY TRANSACTIONS
POAs used in real estate typically fall into two categories:
- Power of Attorney for Buying Property
A POA for buying can be issued to any trusted individual, regardless of whether they are a blood or non-blood relative.
Stamp Duty:
- ₹1,000 per executant (if registered within India)
- ₹500 per executant (if executed abroad)
- Power of Attorney for Selling Property
A POA for selling can also be granted to anyone, including non-blood relatives.
Stamp Duty:
- ₹1,000 per executant (if registered within India).
- For non-blood relatives: Additional stamp duty of 5% of the sale consideration or guidance value, whichever is higher.
- ₹500 per executant (if executed abroad)
- For non-blood relatives: Same additional 5% stamp duty as above
EXPERT SUGGESTION
When buying a property, you may issue a POA to any trusted individual, irrespective of familial relation.
When selling a property, it is financially prudent to grant the POA to a blood relative to minimize stamp duty costs.
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