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In India, a Power of Attorney (PoA) is a legal document. Through this system, a person authorizes another person to make decisions on his/her behalf in certain matters. The person granting the power is known as a principal, and the assigned individual becomes an agent.
Assigning a PoA is a common practice for NRIs managing their Indian assets while outside India. But there could be a certain situation where revoking the PoA becomes necessary. Henceforth, understanding the PoA and its cancellation process is essential.
In this blog, we will understand how to cancel a power of attorney in India, including the circumstances under which it can be revoked and more.
Key Takeaways
- To cancel a POA, the person who granted it (the principal) should draft a formal document titled a deed of revocation or cancellation.
- If the principal POA was registered, the revocation deed must also be registered with the same authority office. If it was notarized, the revocation deed should also be notarized.
- The cancellation or revocation is legally effective only upon written notice to the attorney (the agent). Henceforth, send the notice via registered post to avoid any disputes.
- As the revocation of the POA comes into effect, notify relevant third parties, such as banks, land registries, and financial institutions, where the POA was or could be used.
- Publishing a public notice in a local or national newspaper is highly recommended to inform the general public and associated third parties.
What is the Power of Attorney Meaning
The Power of Attorney Act 1882 defines a Power of Attorney as any instrument authorizing a specified person (known as the agent) to act for and in the name of the person executing it (the principal). The agent is also known as the attorney-in-fact or a POA holder.
The POA grants the agent legal authority to make certain decisions for the principal regarding finances, medical care, and property. Through the PoA, a principal-agent relationship is established, and thus the person who has given the PoA (principal) is legally bound for the agent's acts done under the POA.
The Power of Attorney is revocable; however, there are also irrevocable POAs.
What Are Types Of Power Of Attorney
In India, there are two commonly used types of PoA used by individuals and businesses
General Power Of Attorney
A General PoA provides the agent the authority to act on behalf of the principal in all matters permitted under the law. The agent may be authorized to sell the property, appear in court, sign cheques, buy stocks, lease property, appoint caretakers for assets, and more.
Specific Power Of Attorney
The specific PoA authorizes the agent to deal with a specific subject or matter on behalf of the principal. For example, the specific PoA document states that the designated agent may collect rent from the property only. Then, in such cases, the agent is not entitled to do anything other than collect the rent; they are not even allowed to extend the property's rental term. An agent who has been granted a specific POA cannot overstep and make the decisions.
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Circumstances Where The POA Can Be Revoked
There are certain situations in which a specific or general POA can be canceled or revoked. Although the laws governing POAs and contracts in India do not provide any rules for revoking a POA. Henceforth, the courts have settled on the circumstances under which a POA can be revoked or canceled.
Ways in which the POA can be revoked are as follows
By The Acts Of The Principal
There are certain situations in which the principal can revoke the PoA and terminate the principal-agent relationship. The following are the situations under which the principal can revoke the POA.
- On his/her own will by express revocation of authority.
- When the purpose of the POA has ended.
- When the agent becomes of an unsound mind or insolvent.
Breach Of POA Contract
The principal can revoke the POA contract when the agent mismanages, breaches a term of the contract, or acts beyond the scope of their powers. In such cases, even an irrevocable POA can be revoked by issuing a revocation notice. In the worst case, if required, the principal can approach the court of appropriate jurisdiction to seek revocation of an irrevocable POA.
Circumstances Where the POA Cannot Be Revoked
When the agent has an interest in the POA's subject matter, the POA cannot be revoked without the prior consent of the agent. Under the Indian Contract Act, Section 202 states that where the agent develops an interest in the subject matter of the POA, then the principal cannot revoke the POA, as it will harm the interest of the agent.
What Is The Process Of Cancellation Of Power Of Attorney
The following is the overall process to cancel or revoke the POA:
The principal is responsible for drafting a deed/notice of revocation of the POA. The deed will include all reasons the principal is revoking the POA, the names of the parties involved, the effective date of revocation, and the consequences of the action. Since it is a legal document, prepare it on stamped paper based on the type of POA. However, it is advisable for NRIs to seek assistance from a cross-border expert specializing in drafting POAs, as the process involves legal complexities.
Such a deed/notice of the cancellation of the POA must be duly served upon the agent for proceeding with the cancellation procedure.
The deed or the notice of revocation must be published in the national or local newspaper. This is done to inform the people with whom the agent has been interacting on the principal's behalf of the POA revocation.
The same authority that registered the POA must register the cancellation deed for the POA.
A copy of the revocation of the POA deed should be sent to the designated agent to inform him/her of the POA revocation registration.
The paper publication has to be the registered cancellation deed of the POA to inform the public that the designated agent has been removed.
Furthermore, copies of the POA cancellation can be sent to the individuals with whom the agent has previously been in contact, so they can cease any dealings or business with the agent.
In case of the principal's or agent's death, insolvency, or insanity, the POA is automatically canceled or revoked.
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The Bottom Line
For NRIs, it is highly recommended to seek the assistance of lawyers to ensure accuracy and adherence to legal requirements while drafting any type of Power of Attorney Revocation Deeds for NRIs. As an NRI, if you are seeking professional consultation for NRI POAs activation and revocation, Savetaxs is the name to trust.
Our experts will provide end-to-end consultation to help you handle legal, financial, and real estate POA operations in India. From property management and transactions to document execution, registration, banking, financial oversight, liaison with authorities, and more, we handle it all.
Connect with us as we serve our clients 24/7 across all time zones.
Glossary
- Double Taxation Avoidance Agreement (DTAA): DTAA, an Agreement Signed Between the Countries to Avoid Double Taxation.
- Direct Tax: Direct Tax, a Type of Tax Imposed on Income, Sales, or Property, Based on the Ability to Pay.
- Annual Information Statement: Annual Information Statement Includes Taxpayers' Information, Including Securities, Interests, Dividends, and Transactions.
- Joint Venture (JV): Joint Venture, a Partnership Between the Entities to Achieve a Common Business Objective, Contributing Resources Like Capital, Technology, and Expertise.
- E-Assessment: E-assessment, an Online Process for Conducting Faceless Assessments, No Physical Contact Needed.
Disclaimer
Note: This guide is for information purposes only. The views expressed in this guide are personal and do not constitute the views of Savetaxs. Savetaxs or the author will not be responsible for any direct or indirect loss incurred by the reader for taking any decision based on the information or the contents. It is advisable to consult either a CA, CS, CPA or a professional tax expert from the Savetaxs team, as they are familiar with the current regulations and help you make accurate decisions and maintain accuracy throughout the whole process.
About Author
Hatim Dudhiyawala is a Certified Public Accountant (CPA) with SaveTaxs and specializes in Indian and NRI taxation. He advises individuals, NRIs, and businesses on income tax filing, capital gains taxation, DTAA benefits, fund repatriation, and tax compliance. With experience in cross-border tax matters, Hatim helps taxpayers understand complex regulations and make informed decisions. Through his articles, he shares practical insights to help readers stay compliant and manage their tax obligations with confidence. See Full Bio
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Frequently Asked Questions
Yes, an NRI can revoke a POA from abroad by executing a revocation deed.
If the original POA was registered, the revocation deed should also be registered.
In India, you can cancel your POA by registering the POA cancellation deed with the same authority that registered the POA. However, before registering the revocation deed, it must be drafted, sent to the agent, and published in a national or local newspaper.
The POA is valid till it is revoked or till the principal or agent passes away, becomes insane, or becomes insolvent.
It is not always mandatory, but yes, highly recommended for public notice.