Close relatives should be clearly defined to reduce Stamp Duty implications on the Power of Attorney examines Adv.R.P.Rathod

As per the Bombay Stamp Act, 1958, if a Power of Attorney is given to a person other than a close relative authorising the person to sell or transfer immovable property, stamp duty payable on such Power of Attorney is the same as that on a conveyance on the market value of the property, this is to say that the stamp duty could be up to 5% of the market value of the property if such property is in Mumbai says Adv. R. P. Rathod.

This amendment was brought about in the Act with effect from Dt. 5.6.2008 he further adds. The amendment also provided that if a Power of Attorney is given to a relative authorising him/her to sell or transfer immovable property without consideration or without showing any consideration, then stamp duty payable on such Power of Attorney would be Rs. 500/- It is further stated that the said stamp duty amount of Rs.500/- is applicable if such Power of Attorney is given to father, mother, brother, sister, wife, husband, daughter, grandson, granddaughter or 'such other close relative'. It seems that the word 'son' has been erroneously missed out, but the same can surely be covered by the words 'such other close relative'.

However, it is still quite ambiguous as to who else would fall within the category of 'such other close relative'. This has caused a lot of inconvenience to people desiring to execute Power of Attorney for sale or transfer of immovable property.

Take, for example, a person staying abroad desires to sell his immovable property but does not have the abovementioned relatives staying in the city to whom he could give such a Power of Attorney to do the needful. In such case he may have to come down personally which in many cases could be extremely inconvenient and very expensive and could cause a delay in execution of the sale document.

To make it convenient for people, words 'such other close relative' should be clearly defined, especially in light of the fact that several people who have migrated or who are staying abroad may also have their immediate family members staying abroad with them. Other relatives such as brother-in-law, sister-in-law, father-in-law, mother-in-law, son-in-law, daughter in-law, brother or sister of either of the parents, nephew and niece should be specifically included within the definition of 'such other close relative’.

Further, it has been provided that when stamp duty is paid as that on a conveyance on such a Power of Attorney i.e. a Power of Attorney to a non-relative or to a relative with consideration given for the purpose of selling or transferring a property, and if a conveyance is executed for the same property in pursuance of such a Power of Attorney between the executants of the Power of Attorney and the person in whose favour the Power of Attorney is executed, the duty on the conveyance shall be duty calculated on the market value of the property reduced by the duty already paid on such a Power of Attorney.

A Power of Attorney is a document by which a person gives authority to another person to act on his/her behalf. A Power of Attorney can be specific to certain acts and such a Power of Attorney may be called 'Specific Power of Attorney' or 'Special Power of Attorney' or 'Power of Attorney'. Power of Attorney can also be wide enough to cover most acts which the executants can do and such a Power of Attorney is generally called 'General Power of Attorney'. However it is the contents of the Power of Attorney that matters and not the title thereof. The person to whom the Power of Attorney is given is called 'the attorney'.

In all cases including in case of a General Power of Attorney, it is now advisable to mention the details of the property in respect of which the Power of Attorney is to be utilised as the Sub-Registrar now insists on the same concludes 
Adv. R. P. Rathod.

-      Adv. R. P. Rathod.