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It is a bad idea to give a POA which authorises the power agent to do any activity related to an asset. There are umpteen cases where the power agent has sold off/ pledged an asset without the intent or consent of the owners.

So,for example,if you are travelling abroad and want your power agent to let out a property on rent then the POA should mention the right of the power agent to be only to identify a tenant and to sign the rental agreement. In addition,the POA should be mentioned to be valid only for the period for which the owners are travelling abroad. Customising a standard POA document to the exact needs of the moment is not a choice but is essential.

What is liquidity in investments? Which investment is the most liquid?

Sharmila Joshi,Pune

This is the speed at which an investment could be converted into cash. Gold has the highest liquidity as it can quickly be pledged for cash. Selling gold though may not be as easy. Shares have the next highest liquidity 2 days to cash in bank. Mutual funds come next 1 to 3 days for liquid or equity funds. Real estate has the least liquidity among investments. 

I am a salaried individual with TDS being deducted from my income. Due to genuine reasons,I was unable to file my returns by July 31. I do not have any other tax pending to pay to the government through my other investments as well. Can I file returns now? Will there be a penalty for this?

Shamik Banerjee,Gurgaon

The deadline for the tax filing has been extended to August 31. In your case the tax pending is nil. This includes all those who have either paid advance tax or have paid via TDS and thus have no outstanding taxes to be paid up. This is a comfortable situation. One can file the returns by the end of that financial year without any penalty being levied. Thus,for the current assessment year one can safely file returns up to March 31,2013. However,in case of filing returns for the current assessment year beyond that date will result in a penalty of Rs 5,000 which is again at the discretion of the assessing officer.

The expert is CEO,Bankbazaar.com

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