Who is an NRI?
An Indian abroad is popularly known as Non-Resident Indian (NRI). NRI is legally defined under the Income Tax Act, 1961 and the Foreign Exchange Management Act, 1999 (FEMA) for applicability of respective laws. Also, a Hindu Undivided Family (HUF), firm or other association of persons is Non-Resident if control and management of its affairs is situated wholly outside India. A company is said to be resident in India in any previous year, if it is an Indian company; or the control and management of its affairs is situated wholly in India. Every other person is said to be Non-resident in India if control and management of his affairs is situated wholly outside India. If a person is resident in India in respect of any source of income, he shall be deemed to be resident in India in all respects .
Use of Power of Attorney for NRI’s
Non Resident Indians having properties or non-property transactions, who cannot come every now and then to complete the transactions then they have to entrust someone who stays in India to do that for them and in such situations Power of Attorney (PA) deed can be created in favor of any sincere and trustworthy person. It is pertinent to mention herein that it is not required to come to India to create the required deed. It can be done from any country of the world.
A Special Power of Attorney can also be made but it deals with only specific transactions while General Power of Attorney deals with all general transactions and requirements.
Power of Attorney by NRI’s:
Non Resident Indians can give the power to some other individual on whom he banks on and trusts completely. Basically, to deal with the financial transactions, banking, tax related payments, buy and sell or most appropriately transact properties etc.
Procedure to make a Power Of Attorney deed by NRI’s:
- Drafting of the Power of Attorney deed and making it legally valid by drafting it on a blank paper.
- Getting the deed attested/ Notarized at Indian Embassy or consulate in that particular country.
- The Grantor (person who is levying the power of Attorney and making it), shall sign all the pages of the deed.
- The attested deed should be sent to India by registered post or courier.
- Lastly, the person who receives the deed of power of attorney should get it registered from the Local Sub- Registrar Office or Sub- Divisional Magistrate office in India, by paying appropriate registration charges.
Also, the person making the deed should be of proper mental capacity and should not be any lunatic or mentally incapable person. Furthermore, NRI’s should also provide residential address of whichever place and country they are residing in.
Major prerequisites to keep in mind while preparing Power of Attorney in case of NRI’s:
When Power of Attorney is made by an NRI, residing outside India then following clauses are required to be considered while drafting:
- Date of commencement of Power of Attorney, Place wherein it has been drafted as well as place of its execution.
- Proper Signature should also be there in the deed.
- The person who is levying the Power of Attorney has to sign each and every page of the deed.
- Appropriate reasons as to the purpose of Power of Attorney deed.
- The name, Father’s name, Age, Residential proof both of India and foreign land, profession/ occupation of both (the person who is making the deed and the person in whose favor the deed is made).