Are you an NRI looking to sell property in India, but distance and paperwork complexities make the process daunting? You’re not alone. Many NRIs face confusion around Power of Attorney (PoA), legal risks, and the maze of compliance requirements. 

This article provides a complete guide to a smooth and legal transfer of rights for NRIs willing to sell their property in India. 

At a Glance: Selling property as an NRI (the PoA checklist)

1. Decide PoA type: GPA (General) or SPA (Special)

2. Draft the PoA: Engage a legal expert, specify purpose, powers, property, and validity

3. Execute on stamp paper: Typically ₹100, check state variation

4. Authenticate: Notarize and apostille- or sign at an Indian Consulate

5. Adjudicate/Register in India: Visit sub-registrar or send agent

6. Deliver the PoA: Send originals by secure courier to your agent

7. Monitor use: Track progress and compliance; revoke if needed

Understanding Power of Attorney (PoA): types and legal importance for NRIs

Power of Attorney is a legal document that authorizes a person (Agent) to act on behalf of another person (Principal). Any legal entity (individual and non-individual) can give such authority to another legal entity. Primarily, the Powers of Attorney Act, 1882, and specific sections of the Indian Contract Act, 1872, provide legal validity to a PoA. 

For the purpose of legal enforceability, a "Principal" needs to create a PoA document, mentioning all the necessary terms and conditions of the authorization. These terms and conditions define the scope of a PoA. As long as an "Agent" is acting within that pre-defined scope, the actions are legally binding upon the "Principal". 

Types of PoA

PoAs can be of two types- General Power of Attorney (GPA) and Special Power of Attorney (SPA)

For NRIs selling property in India, choosing the right type of PoA is critically important. 

Note: An SPA becomes inactive (ceases to exist) as soon as the action it authorizes is complete. 

Legal Note: Since the Supreme Court Judgment (Suraj Lamp & Industries Pvt Ltd vs State of Haryana, 2011), GPA cannot be used for property transfer. Only a registered SPA is valid for property sales by NRIs.

Step-by-Step process for creating a valid PoA from abroad

1. Draft the document 

Consult a legal professional familiar with NRI transactions and state rules. Based on your requirements, they can guide you on which type of PoA is suitable- GPA or SPA. 

A PoA must include:   

• Complete details of the Principal and the Agent.

• Clarity of purpose and scope of authority.

• Duration of the authority.  

• Terms and conditions of authorization. 

• Signatures, place, and date of execution.

Note: Ensure to add all the safeguards in the PoA document: reporting duties, indemnity, revocation, and payment protection clauses.

2. Execute on appropriate stamp paper 

For the majority of property-related purposes, a Rs 100/- denominated stamp paper is necessary. However, it may vary from Indian state to state. NRIs may order and purchase stamp paper online, paying appropriate fees and mentioning their delivery addresses. Vendors deliver physical stamp papers to the delivery addresses mentioned in the purchase orders. 

3. Notarization of the PoA document 

The Power of Attorney document can be notarised in 2 different ways: 

• Signing the PoA at an Indian consulate in front of a consular official and two adult witnesses; or,

• Signing the document in front of a local notary public authority in your country of residence and getting an Apostille Certificate (countries that are signatory to the Hague Apostille Convention). 

• Online notarisation via the Rupeeflo app  

Check out our blog on where to get your documents notarised and the essential guide to notarisation for NRIs

4. Adjudication/registration of the PoA document 

Is PoA Registration Mandatory for NRIs?
Under Indian law, registration of a Power of Attorney is only required when the document empowers the agent to execute sale or transfer of immovable property rights. For routine financial or administrative powers, registration is optional.

How Is a Property Sale PoA Registered?
For property sales, the document must be adjudicated (stamped) and registered within four months of execution as per the  Registration Act, 1908 at the local sub-registrar’s office. 

Usually, the principal registers the PoA, but agents may sometimes do so with authenticated originals. NRIs must check state-specific requirements, as these can vary by location (e.g., Maharashtra, Karnataka, Delhi).

Important: For selling property, only a registered Special Power of Attorney is legally valid. Unregistered or general PoAs cannot be used for this purpose.

5. Delivery to the Agent and usage 

Once the notarization is complete, the Principal can deliver the PoA document to the Agent's address by courier or by under certificate postage.  

Scope of authority: what powers can be granted?

For property sales through an authorized legal entity (the Agent), the following powers can be granted in an SPA. 

• Negotiation and finalization of the terms of sales 

• Executing preliminary sales agreement 

• Representation on behalf of a Principal in front of a legal authority (judge)

• Handling sales proceeds from the buyer in the form of a bank transfer or receiving a cheque 

• Handling legal and administrative documentation for the completion of the ownership transfer 

• Addressing legal disputes arising during a transfer of ownership 

Country-specific procedures for PoA execution

In every country with a diplomatic relation with India, NRIs can legalize a PoA document by signing it in front of a consular official. For that, an NRI needs to schedule appointments with the respective Indian consulate in advance. 

If an NRI is residing in a member country of the Hague Apostille Convention, they can also choose to notarize a PoA document in front of a local notary public. In that case, visiting the Indian consulate is not necessary. 

125 member countries accept the Apostille stamp as proof of legalization of an official document. Some of these countries are,

• India

• The United States

• Canada 

• The United Kingdom

• France

• Germany

However, some countries with significant NRI populations are not members of the Hague Apostille Convention. So, if you are living in any of those countries, you must legalize a PoA in front of an Indian consulate official. A few of such countries are, 

• UAE

• Bangladesh 

• Indonesia 

• Qatar 

• Kuwait 

Legal safeguards and clauses to prevent misuse of the PoA

Clearly mentioning specific clauses in a PoA draft is essential for availing of legal safeguards. These clauses are, 

• Specificity clause - mention every power being authorized explicitly, and also mention actions that are explicitly prohibited. 

• Duration of a PoA and its termination - NRIs willing to sell properties in India using a PoA must explicitly mention the duration for which the authorization is valid. It is also essential to mention when a PoA is automatically terminated if the purpose is not met. 

• Accountability clause - It covers the liability of an Agent to report the status of the task being authorized in regular intervals, as long as the PoA is active. 

• Indemnity clause - It states that an Agent needs to indemnify the Principal in case of loss arising from any action taken by the Agent. 

• Payment protection clause - It protects a Principal from misuse or misappropriation of sales proceeds by an Agent.

• Revocation clause - It protects a Principal's right to revoke a PoA at any time, if necessary.  

Tax & Compliance: How to Receive the Proceeds

• Funds from property sale must be transferred to the NRI seller’s NRO account directly via cheque, DD, or Indian bank transfer.

• The PoA holder must NOT accept funds personally; this is prohibited by FEMA, and TDS must be deducted by the buyer as prescribed by the Income Tax Act.

• Repatriation of sale proceeds abroad is subject to RBI’s $1 million per financial year cap; see [RBI Master Circular on NRI Accounts].

• Retain all sale and tax documents for reference in case of scrutiny or refunds.

Frequently Asked Questions 

1. Who can an NRI appoint as Power of Attorney? 

An NRI can appoint any legally competent adult resident Indian as PoA. The PoA appointee does not have to be in blood relations. Professionals, like lawyers, tax consultants, property agents, can also be PoA. However, common practice is to choose someone within the family or friend network.  

2. Can PoA appointee sign a sales deed on an NRI’s behalf? 

Yes. They can. However, the PoA document has to be registered in India. Unregistered PoAs are not valid for sales deed formalities on behalf of NRIs. 

3. Can a PoA receive money on behalf of an NRI selling property in India? 

PoAs can never receive money in their bank accounts on behalf of NRIs selling properties in India. They can only facilitate transfer of funds through cheque or bank transfer to NRIs’ accounts.