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Originally posted by prempujari

I am a Canadian citizen.

My family wants to sell a flat in India and want me to sign and send a relinquishment deed to give power of attorney to a relative residing in India.

What are the formalities to be completed from here in Canada?

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I would have said go ahead and give it away. But that is not what you are asking is it?
Relinquishment means giving it away totally without any conditions to some one there, who is receiving the Power of Attorney.

First and foremost, you lived in India and worked there too, so you should have a PAN Card and a PAN Number to start with. I am sure you have a Bank Account there too. Since you don't live there, you should give another POA for handling of your Tax Return to some one there to take care of this also. That comes later.

To sell this Property you Must have a clear title and you should have the permission of your 'better half'.( find out about it at the Indian end)

If it is for sale and they sell it on your behalf and give you your share or portion of the entitlement, then you have to provide them with a Specific Power of Attorney, which when they have it there, can do exactly what you would have done and your share gets deposited there in to your Bank Account. But they sign and take charge of it.

From the time when the sale proceed is deposited, you have SIX months to do one or the next. This is to shelter the Capital gains. To avoid getting taxed, on the gains you made while you held on to the property. .... and from the proceeds....

1) Take upto 50 Lakhs of Rupees and buy the Local Electricity Board Bonds in India. You then hold it for a period of three years and pay taxes on the interest portion only for the next three years. They pay about 6.5% p.a. interest on the deposit. Please check it out.
OR
2) Buy or build a home and complete it with the sale proceeds within a period of THREE YEARS from the date of receipt. (This is a vicious cycle) It is O.K. if you are going to live there, or for some one who is living there.

STILL, It is you, who is responsible to take care of all of this. Also, you have to file a Tax return there. Alternately you pay the Capital Gains Tax on it and use the balance as you wish.

There are some reliefs provided, if you held the property for a long period. An accountant will be able to tell you more about it. See an AUDITOR to get the clarification. The relief is the sum that is not taxable. It is based upon the year you bought the property and the Cost of Living Inflation Index, and how long you held it to make that gain.

Now to the question you raised:

If you are giving the Power of attorney, it is advisable to create one to suit your needs and you specify what you want done. That is called Specific Power of Attorney. You draft one. (Type one at home) Then take it to a Lawyer or a Notary Public and get it notarized and send it to the person. That is O.K. BUT it has MORE Value if you take the same to the Indian High Commission here in Canada and pay their fees and you sign the same "in their offices", with copies of course, and the Office there signs saying that it is you who is signing the Power of Attorney and apply their seal to giver it the Proof of your signature and verify it.(The fees are about $25 per page. So, type it on a legal sized Paper to accommodate all of this.

So, you have two options. But you need the time and have to go through the troubles and the expenses associated with it.

When they receive it, they will do it the way you want them to do it.

Freddie.