Important Points On Power Of Attorney By Nri

By Author: AKT Associates
Total Articles: 2
Comment this article

Overview:-
Generally , the existence of Power Of Attorney depends upon the Existence of NRI .If NRI is absent within India while selling the property to the Indian Buyer then Only Power Of Attorney come into picture .So here in , the power of Attorney Holder will be the representative of the NRI being seller . Even the same thing will move in when the Buyer is NRI and the seller is Indian Resident .
The most importantly the purpose/reason for the execution of a power of attorney should be clearly mentioned in the Power of Attorney.

Attestation of POA :-
Attestation of POA should be made at Indian Consulate/Embassy and the registration of the should be the same in India.
The main thing to be pondered is that Attestation of POA is required even if Seller is not NRI .Further ,it is to be noted that If the POA is executed in the Indian Country then Attestation is not required in India and vice versa required if the POA is executed in the foreign country then POA registration will be required .

Consideration to NRI Seller
There might be the cases where the buyer was insisted to make ...
... the payment to the POA Holder not to the NRI seller .
Buyer should avoid the these cases where payment consideration is made in this manner to the POA holder not to the NRI seller .

TDS compliances
Buyer has to comply provisions of TDS while making the transactions relating to the Immovable property .
As in this case as we aforementioned discussed , POA holder has been assigned to complete the whole transactions in relation to Immovable Property between the NRI seller and Indian Buyer. So conflict may be arises regarding the Payee (the person who will receive the consideration ) whether Payee will be treated as the Indian Resident or NRI .
Thus accordingly , buyer should be careful while deducting TDS under section 195 not under section 194 IA (applies where payee is Indian Resident ).

Insertion of Indemnity Clause :-
A safeguard should be maintain between Buyer and seller by inserting a clause in the sale deed, so as if any conflict or
Misconduction come then strict action terms & conditions should be
implemented and accordingly one should indemnify the another.
So safeguard should be maintained while considering the transaction relating to the Immovable Property .

Conclusion :-
While making transaction in relation to Immovable Property ,Buyer should be beware of the aforementioned points .
As Indian Buyer may be dishonestly cheated by the NRI seller .so Buyer should legally compliant all the Indian Taxation laws or Legal Laws thereof .
It is also advisable to the buyer to take assistance of the Professional like CA or CS before entering into these type of Transactions .
This will lead buyer will be beware of fraud or risk attaching to the transaction there of .Each and every compliance should be made by the buyer and the seller both .