sumit (manager) 20 January 2011

Urgent POA Question

Hello,

My wife and I live abroad in the US, and we have a property in Bangalore in our joint name. We are in the process of selling it, and we have given the POA to my brother in India (the POA is from my wife and myself to my brother). The POA has already been stamped by the consulate in the US, and now needs to be adjudicated in Bangalore.

When my person went to get the POA adjudicated at the sub-registrars office, he was told that we would have to pay stamp duty for the POA adjudication because the POA was from my wife to my brother also, which is not a blood relation. We were told that the stamp duty would be 6% of the "Govt Value", and that this stamp duty would be adjusted for during the time of final registration.

Then I spoke to my lawyer, who said that the stamp duty would be 3%, not 6%, as only my wife is giving POA to non-blood relation and I am giving to blood relation, and that the duty would be not on the Govt Value, but on the registration value, and this would be adjusted for during the final registration. My questions are:

1) Are we required to pay stamp duty for adjudication of the POA?

2) If yes, what is the right stamp duty amount and is it on the govt. value, or the market/registration value?

3) Will the stamp duty I pay now, be adjusted for during final registraion of the property?

Greatly appreciate any help.

Sumit

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7 Replies

A V Vishal (Advocate) 20 January 2011

1) Are we required to pay stamp duty for adjudication of the POA?

Ans. Yes, you are required to pay the stamp duty.

2) If yes, what is the right stamp duty amount and is it on the govt. value, or the market/registration value?

Ans.

The same duty as a conveyance [ under Article 20(1)], which is 7.5% on consideration or on market value of the property (which is the subject matter of such power of attorney) whichever is higher..

[ Provided that the duty paid onsuch power of attorney is adjustable towards the duty payable on the instrument of sale or transfer executed subsequently between the same parties and in respect of the same property.]

3) Will the stamp duty I pay now, be adjusted for during final registraion of the property?

Ans. Already replied above.

A V Vishal (Advocate) 20 January 2011

Please note that Article 20(1) has been amended from 6% to 7.5% WEF 01.04.2009

Darshan Panchal (Advocate) 20 January 2011

If the local lawyer is of the opinion that u ' ll have to pay stamp duty at the rate of 3%, then he is to be believed since rates of stamp duty are different in states. like POA to father or mother or close relative in gujarat attracts stamp duty of rs. 500 which may not be the case in karnataka. So far the adjustment is concerned like vishalji said it will be adjusted if the transaction is between the same parties and in respect of the same property. The stamp duty will be payable on market value of the property. Pls go by what the local good lawyer says.

suresh (Advocate) 20 January 2011

Dear Mr. Sumit

For your First question - yes you need pay the stamp duty, when you are giving a power to other than the family members section 41(eb) of the Karnatka Stamp Act will apply, under this provision you need pay same duty as Conveyance Under Article 20(1) of the said act. Under section 20(1) of the Karnataka Stamp Act you need to pay 6% of the value.

For your Second question – whatever the consideration amount you shown in the sale deed on that you need to pay the stamp duty.

For your third question – Yes will be adjusted for during the registration of the sale deed [ Provided that the duty paid on such power of attorney is adjustable towards the duty payable on the sale or transfer executed subsequently between the same parties and in respect of the same property.]

regards

Suresh.N.V.

sumit (manager) 21 January 2011

Dear All,

Thank you for your responses. Can you suggest a good property lawyer in Bangalore that I can consult for this and some other issues? I will greatly appreciate the help.

Regards,

Sumit