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The Hindu : GPA and transfer rightsLet us identify and discuss the different types of powers of attorney being used in property transactions and their implications in all States across the country.With stamp duty being very high in many States, methods were being found to effectively transfer rights in immovable property through what is known as “GPA” (General Power of Attorney) transactions without actually effecting any formal sale or transfer of rights in immovable property under normal deeds of transfer or sale.AdvantageThe added advantage sought to be derived from such transactions was avoiding the incidence of taxation on “Capital Gains” or “Income” arising from normal and formal deeds of transfer or sale of immovable property.In this context it is pertinent to refer to Article 41(e) of the Karnataka Stamp Act, 1957, and Rules 1958 which state as follows:Nature of transactionPowers of Attorney when given to a person other than close relatives such as father, mother, wife, husband, son, daughter, brother, sister for consideration and authorising the attorney to sell any immovable property.Levy of stamp dutyThe same stamp duty as Conveyance (Article 20 of the Karnataka Stamp Act, 1957) will be levied for a market value equal to the amount of the consideration. The actual rate of stamp duty levied works out to 7.5 per cent (excluding surcharge and cess).Further, it is also mentioned in Article 41(ea) that where a promoter or a developer is given the powers for construction, development, sale or transfer of any immovable property situated in the State of Karnataka, the stamp duty leviable is as under:Where the market value of property1) Does not exceed Rs. 1 crore: Rs. 10,000.2) Exceeds Rs. 1 crore and does not exceed Rs. 2 crore: Rs. 20,000.3) Exceeds Rs. 2 crore and does not exceed Rs. 5 crore: Rs. 50,000.4) Exceeds Rs. 5 crore and does not exceed Rs. 10 crore: Rs.1,00,000.5) Exceeds Rs. 10 crore: Rs.1,50,000.The stamp duty…More