Understanding Power of Attorney and Its Types

Summary: A Power of Attorney (PoA) is a legal document that allows an individual (the Grantor) to authorize another person (the Attorney/Grantee) to act on their behalf in matters such as property dealings or legal issues. This arrangement is particularly useful when the Grantor is unavailable due to business or travel commitments. There are two main types of PoA: a General PoA, which grants broad authority over multiple transactions, and a Specific PoA, which is limited to a particular transaction or act. A PoA can be revoked by issuing a notice to the Attorney, once the intended purpose is fulfilled, or upon the death/insolvency or mental incapacity of either party. An Irrevocable PoA, however, permanently transfers certain decision-making rights and cannot be modified or withdrawn without the Attorney’s consent. It’s important to note that a PoA is not a title document and does not convey ownership or rights in immovable property. Regarding stamp duty, under the Maharashtra Stamp Act, 1958, a PoA authorizing general or multiple transactions typically attracts a stamp duty of ₹500. However, if a PoA is given for consideration and grants the authority to sell immovable property, it is charged at the same rate as property conveyance under Article 25 of Schedule I of the Act. This framework ensures that PoAs are used appropriately, with clear legal boundaries and documented authority.

If due to exigencies of business, travel plans etc., a person/s is/are not available to attend to his/her/their affairs viz. property related, legal issues, etc., he/she/they can authorise a confidant, to carry out activities, on his/her/their behalf. In such a case, a PoA is executed between the party/ies granting such power/s (‘Grantor’) and the person authorised to carry out such activities (‘Attorney’ / ‘Grantee’).

A. Types of PoA:

B. Can a PoA be revoked?

Yes, a PoA can be revoked under the following circumstances:

a) When the Grantor sends a notice to the Attorney of his intention to revoke the PoA;

b) When the purpose mentioned in the PoA is accomplished;

c) When either the Grantor or Attorney becomes of an unsound mind / dies or adjudicated as insolvent.

C. What is an Irrevocable PoA?

By way of an irrevocable PoA, the Grantor permanently transfers specific decision-making rights to the Attorney. These rights cannot be withdrawn or modified without the Attorney’s consent.

D. Can a PoA be recognised as a title document or document conferring right in an immovable property?

No, a PoA cannot be recognised as a title document or document conferring right in an immovable property.

E. Stamp duty payable for a PoA:

Let’s take the Maharashtra Stamp Act, 1958 (‘Act’) for example.

Article 48 of Schedule I of the Act interalia deals with the following stamp duties payable for a PoA:

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Disclaimer: This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement.