Children abroad? Why parents need a power of attorney

livemint.com:

Mint reader asked if he could pay municipal taxes for his son, who lives in the US and owns property in Pune. Bhuta responded: “Payments made by a resident on behalf of a non-resident are prohibited under FEMA unless specifically allowed. Therefore, such payment of taxes on behalf of your son would not be permitted under FEMA." The only legal option is to gift the funds to the son’s NRO account and use a PoA to make the payments.

Without a PoA, every financial decision on behalf of your child risks legal trouble, jeopardising both their finances, and exposing you to penalties. A PoA is essential for managing your child’s financial affairs legally and efficiently. It enables you to handle tasks such as managing real estate, paying taxes and overseeing investments.

You can also operate your child’s NRO account with a PoA, and ensure that payments like municipal taxes and property management are compliant with the law. “Ideally, it’s advisable to have a PoA which allows the parent to carry out transactions in a legal way. Without it, the consequences can be significant." Nayak said.

Obtaining a PoA is cost-effective compared to the potential penalties for not having one. In Maharashtra, the stamp duty is ₹500. The PoA must be registered with the sub-registrar’s office.

Costs and registration requirements may vary by state. The process of obtaining a PoA is straightforward. Once your child grants you the authority, you must register the PoA with the sub-registrar.

As mentioned, stamp duty varies from one state to another, but it is a one-time cost to ensure the document’s legal validity. Once the PoA is ready, initiate communication with the bank to ensure it is properly recognised. First submit a copy to the bank where your