2% stamp duty on power of attorney draws mixed response

Neeraj Bagga

Amritsar, January 12

The move to levy two per cent fee on the overall cost of property for executing power of attorney (PA) for non-blood relation has evoked mixed response from the people.

The move plugged a gap that earlier denied the government its share of stamp duty under the veil of free of cost the PA. Instead of registering properties with the Revenue Department, real estate dealers have been executing deals worth crores on the PA. Irrespective of the property cost, they used to pay Rs 2,000 on the execution of the PA. Now, as per new bill approved by the government, they have to pay two per cent of the collector rate of the property. It means paying Rs 20,000 on a property valuing Rs 10 lakh as per collector rate.

Mohinder Pal Gupta, a lawyer, said as per law, the PA was considered cancelled in case one of its executor or holder died. He said, “The PA is non-transferable. As per the Registration Act, the PA and will can be executed anywhere in the country and abroad.”

Naresh Sharma, a deed writer, said the new law ensured that the government gets its due. He said it would be rider on the sale and purchase of property on the PA. He said the people used to sell and purchase properties on the PA as its cost was negligible and denied the government its due share.

He said, “However, there are several doubts need be cleared by the government. For example, how a local resident with his property in any other district of Punjab will know its authentic collector value to execute the PA.” He said similar problems would crop up within the district as collector rates were different in tehsils. In many cases, it was noticed in the past that the elderly and infirm people were unable to execute the PA conveniently, he added.