Short Answer: No.
An NRI living in Australia can execute a Power of Attorney (POA) in favour of both family members and non-family members for property transactions in India.
However, the stamp duty payable in Karnataka depends on who is appointed as the attorney, particularly when the POA authorises the sale of immovable property.
Power of Attorney for an NRI Buying Property in India
If an NRI is purchasing property in India, they may appoint any trusted person as their attorney.
This includes:
Family Members
- Father
- Mother
- Brother
- Sister
- Husband
- Wife
- Son
- Daughter
Non-Family Members
- Cousins
- Friends
- Colleagues
- Advocates
- Property consultants or brokers
Stamp Duty
For a POA executed for purchasing property, the stamp duty is Rs.500 per executant, irrespective of whether the attorney is a family member or a non-family member.
Power of Attorney for an NRI Selling Property in India
When an NRI authorises someone to sell a property in India, the attorney can still be either a family member or a non-family member.
The major difference lies in the stamp duty payable at the time of adjudication in Karnataka.
Stamp Duty for General Power of Attorney (GPA)
| Attorney Holder | Stamp Duty |
| Family Member | Rs.500 |
| Non-Family Member | 5% of the sale consideration or guidance value, whichever is higher |
Example
Suppose you are selling a 3 BHK apartment in Bangalore.
- Sale Price: Rs.80,00,000
- Guidance Value: Rs.55,00,000
Since the sale consideration is higher than the guidance value, stamp duty will be calculated on Rs.80,00,000.
If the GPA is given to a family member
- Stamp Duty: Rs.500
If the GPA is given to a non-family member
- Stamp Duty: 5% × Rs.80,00,000 = Rs.4,00,000
This amount is payable during the adjudication of the Power of Attorney in India.
Our Recommendation
To minimise stamp duty and avoid unnecessary expenses, we recommend the following:
- Appoint a family member whenever possible if you are executing a General Power of Attorney (GPA) for selling property.
- If you need to authorise a non-family member, consider executing a Special Power of Attorney (SPA) instead of a GPA. In Karnataka, the stamp duty for an SPA is only Rs.500 per executant, even when it authorises the sale of property, provided it is drafted appropriately.
Frequently Asked Questions
Can an NRI in Australia appoint a friend to sell property in India?
Yes. An NRI can appoint a friend or any trusted person through a Power of Attorney. However, if a General Power of Attorney is given to a non-family member for selling property in Karnataka, 5% stamp duty may be payable during adjudication.
Can an NRI appoint an advocate through a Power of Attorney?
Yes. An advocate can be appointed as an attorney. However, the applicable stamp duty depends on the type of Power of Attorney and the authority granted.
Is a Special Power of Attorney cheaper than a General Power of Attorney?
Yes. In Karnataka, a properly drafted Special Power of Attorney (SPA) generally attracts Rs.500 stamp duty per executant, making it a cost-effective option when appointing a non-family member.
Need Assistance?
PGN Property provides end-to-end assistance for NRIs in Australia and other countries, including:
- Drafting General Power of Attorney (GPA)
- Drafting Special Power of Attorney (SPA)
- Guidance on notarisation and attestation
- POA adjudication in Karnataka
- Property registration support
Email: pgnproperties@gmail.com
WhatsApp: +91-97424 79020