{"id":37115,"date":"2021-10-27T14:54:03","date_gmt":"2021-10-27T09:24:03","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=37115"},"modified":"2024-09-27T11:46:15","modified_gmt":"2024-09-27T06:16:15","slug":"how-to-secure-trust-registration-under-indian-trust-act-1882","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/how-to-secure-trust-registration-under-indian-trust-act-1882\/","title":{"rendered":"How to Secure Trust Registration under Indian Trust Act, 1882?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">A trust can either be public or private. Private trusts operate under the ambit of the Indian Trusts Act 1882. <strong>Trust Registration under Indian Trust Act, 1882<\/strong>, renders legal protection for the trustor&#8217;s assets, to ensure those assets are distributed as per the trustor\u2019s intention, and to save time, minimize paperwork &amp;, in some scenarios, avert or reduce inheritance or estate taxes. In this write-up, you will come across procedural instructions for securing Trust Registration under Indian Trust Act 1882.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/how-to-secure-trust-registration-under-indian-trust-act-1882\/#What_do_you_mean_by_the_term_%E2%80%9CTrust%E2%80%9D\" >What do you mean by the term \u201cTrust\u201d?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/how-to-secure-trust-registration-under-indian-trust-act-1882\/#What_is_a_Trust_Deed\" >What is a Trust Deed?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/how-to-secure-trust-registration-under-indian-trust-act-1882\/#Mandatory_Prerequisites_for_Trust_Deed_Registration\" >Mandatory Prerequisites for Trust Deed Registration&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/how-to-secure-trust-registration-under-indian-trust-act-1882\/#Detailed_Process_of_the_Trust_Registration_under_Indian_Trust_Act_1882\" >Detailed Process of the Trust Registration under Indian\nTrust Act, 1882<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/how-to-secure-trust-registration-under-indian-trust-act-1882\/#Key_benefits_of_securing_Trust_Registration_under_Indian_Trust_Act_1882\" >Key benefits of securing Trust Registration under Indian\nTrust Act, 1882<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/how-to-secure-trust-registration-under-indian-trust-act-1882\/#Application_for_the_80_G_Certificate\" >Application for the 80 G Certificate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/how-to-secure-trust-registration-under-indian-trust-act-1882\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_do_you_mean_by_the_term_%E2%80%9CTrust%E2%80%9D\"><\/span>What do you mean by the term \u201cTrust\u201d?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>In view of the purview of the\nIndian Trust Act, 1882, a Trust is referred to as an arrangement where the\ntrustor, i.e. owner, transfers the property to a trustee for the benefit of the\noutsider, i.e. third-party. Such a property is transferred to the trustee from\nthe trustors\u2019 end, declaring that the trustee should hold the property for the\nTrust\u2019s beneficiaries<\/li>\n\n\n\n<li>Trust is set up by settlors\n(person and his or her lawyer) who decide how to transfer their assets to trustees.\nThese trustees are bound to manage such assets for the Trust\u2019s beneficiaries.\nThe rules of a trust revolve around the terms on which it was set up.<\/li>\n\n\n\n<li>A trust can be utilized to\ndetermine how an individual\u2019s fund should be administered &amp; distributed while\nthat individual is alive or after their demise.<\/li>\n<\/ul>\n\n\n\n<p><strong><em>Trusts can be categorized into essential parts:<\/em><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Public Trust<\/h3>\n\n\n\n<p>As the name suggests, the public Trust is the one whose\nbeneficiaries remain the public at large. Moreover, such a trust can be further\nsubdivided into Public Religious Trust &amp; Public Charitable Trust.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Private Trust<\/h3>\n\n\n\n<p>A Private Trust, on the other hand, refers to an arrangement whose\nbeneficiaries include individuals or families. Moreover, such a trust can be\nsub-divided into the following:<\/p>\n\n\n\n<ul>\n<li>Private Trust whose beneficiaries &amp; the requisite shares can be determined&nbsp; <\/li>\n\n\n\n<li>Private Trusts whose beneficiaries &amp; the requisite shares cannot be determined<\/li>\n\n\n\n<li>For the purpose of <a href=\"https:\/\/corpbiz.io\/ngo-registration\"><strong>NGO registration<\/strong><\/a>, one has to take the following matters into account:<\/li>\n\n\n\n<li>Name and Address of the Trust;<\/li>\n\n\n\n<li>The nature of the Trust, whether it is for a religious or charitable purpose;<\/li>\n\n\n\n<li>Trust\u2019s settler<\/li>\n\n\n\n<li>Two trustees;<\/li>\n\n\n\n<li>Trust property whether it is movable or immovable.<\/li>\n<\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/cancellation-of-trust-registration\/\">Cancellation Grounds for Trust Registration 2020: New Changes <\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Trust_Deed\"><\/span>What is a Trust Deed?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Trust deed serves as a legal instrument that is used for\nproclamation of Trust. A trust deed entails various clauses such as name\nclause, registered business place clause, settler &amp; trustee clause, general\nbody member clause, so on and so forth.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Major Inclusions in a Trust Deed<\/h3>\n\n\n\n<p><em><strong>Trust deed primarily entails the following elements:<\/strong><\/em><\/p>\n\n\n\n<p><strong><em>Objects:<\/em><\/strong> The object for which the\nTrust is formed is mentioned in this clause. This is a vital clause as all\nactivities are executed for meeting these objectives only.<\/p>\n\n\n\n<p><strong><em>Acceptance of Funds:<\/em><\/strong> The Trust can accept grants, donations, subscriptions, and contributions from any individual, <em><strong>government<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Government\"><em><strong>[1]<\/strong><\/em><\/a><\/sup> or any other charitable agencies, in cash or in-kind, including immovable assets without any charge on it. However, it is not eligible to accept any such funds with the conditions that compromise the objectives of the Trust.<\/p>\n\n\n\n<p><strong><em>Investments:<\/em><\/strong> It is the liability of\nthe trustees to administer the funds of the Trust legally and efficiently.&nbsp; The additional funds of the Trust that do not\nserve its objective should be used for buying securities and other investments.<\/p>\n\n\n\n<p><strong><em>Power of the Trustees:<\/em><\/strong> The trustees\nare legally obligated to serve their responsibilities in line with the clause\nmentioned in the trust deed. The trustees, in general, have the given powers\nfor the conduct &amp; management of the Trust:<\/p>\n\n\n\n<ul>\n<li>Appointment of the employees or\nalienate the trust properties<\/li>\n\n\n\n<li>Open the bank account in the\nname of the Trust<\/li>\n\n\n\n<li>Leverage legal proceeding in\ncase of dispute on behalf of the Trust<\/li>\n\n\n\n<li>Accept any gift, contribution,\nor donations<\/li>\n\n\n\n<li>Invest additional funds in\nsecurities<\/li>\n<\/ul>\n\n\n\n<p><strong><em>Accounts and Audit: <\/em><\/strong>The trustees are\nobligated to administer the book of account and also get the account audited by\nthe certified CA.<\/p>\n\n\n\n<p><strong><em>Winding up:<\/em><\/strong> In the case of winding\nup of the Trust, the assets of the same shall not be transferred to the\ntrustees. They shall be transferred to other identical organizations or trusts\nwhose objects are identical with the consent of the charity\ncommissioner\/Court\/any other law which is in effect for the time being.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Mandatory_Prerequisites_for_Trust_Deed_Registration\"><\/span>Mandatory Prerequisites for Trust Deed Registration&nbsp; <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Following are the mandatory prerequisites for a trust registration\ndeed:<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>Trust deed printed on the Stamp\npaper enclosing requisite stamp duty;<\/li>\n\n\n\n<li>Passport size photograph &amp;\nIdentity Proof of settlor;<\/li>\n\n\n\n<li>Passport size photograph &amp;\nIdentity Proof of two witnesses;<\/li>\n\n\n\n<li>Passport size photograph &amp;\nIdentity Proof of two trustees;<\/li>\n\n\n\n<li>Signature of settlor on each\npage of the trust deed;<\/li>\n\n\n\n<li>On each page of the trust deed,\nthe signature of the settlor;<\/li>\n\n\n\n<li>Presence of two witnesses on\nthe trust deed.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Detailed_Process_of_the_Trust_Registration_under_Indian_Trust_Act_1882\"><\/span>Detailed Process of the Trust Registration under Indian\nTrust Act, 1882<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Following is the step-by-step process for registering\na trust in India:<\/em><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 1: Name Selection<\/h3>\n\n\n\n<p>The first step is to select the name for Trust. For this purpose, you need to keep the following things in mind.<\/p>\n\n\n\n<ul>\n<li>The name should be unique;<\/li>\n\n\n\n<li>The name should not disrupt the\ninterest of the public or others in any way;<\/li>\n\n\n\n<li>The name should not violate\nTrademark Act in any way<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Step 2: Decides on the number of trustees<\/h3>\n\n\n\n<p>Decide on the number of trustees for the Trust seeking registration.\nAs per the Trust Act, 1882, a minimum of two members are required to register a\ntrust in India.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 3: Draft Trust Deed <\/h3>\n\n\n\n<p>In this step, trustees &amp; the author of the Trust draws a\ncontract known a trust deed and enclose all the relevant provisions under the\nsupervision of a lawyer. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 4: Approach Sub-Registrar with the attested trust\ndeed and two witnesses<\/h3>\n\n\n\n<p>For trust deed registration, trustees &amp; the author of the Trust\nshould visit the sub-registrar office along with two witnesses. Here the\nSub-Registrar will scrutinize the attested trust deed &amp; validate the same\nupon receiving the standard registration fee.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_benefits_of_securing_Trust_Registration_under_Indian_Trust_Act_1882\"><\/span>Key benefits of securing Trust Registration under Indian\nTrust Act, 1882<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>Trust usually comes into\nexistence to serve charitable purposes and avail the tax exemption. Please note\nthe tax implications are not applicable to the income of registered NGOs as\npublic Trusts or Section 8 Companies or society.<\/li>\n\n\n\n<li>Tax exemptions are accessible to registered Trust u\/s <a href=\"https:\/\/corpbiz.io\/80g-and-12a-registration\" title=\"12a and 80g registration process\">12A and 80G of the Income Tax<\/a> Act. Please note that income tax registration is compulsory to access tax exemptions. <\/li>\n\n\n\n<li>A trust safeguards assets from\nthe creditor, &amp; it can dictate the conditions of inheritance for\nbeneficiaries.<\/li>\n\n\n\n<li>Trust can be utilized for\nestate planning. Generally, the deceased person&#8217;s assets are passed to the wife\n&amp; then divided equally among the surviving children. But, children below\nthe age of 18 need to have trustees, someone who takes care of their assets\nuntil they reach the legal age.&nbsp; <\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Application_for_the_80_G_Certificate\"><\/span>Application for the 80 G Certificate<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>80G certificates serve as a legal certification that exempts the taxpayers partly or wholly from paying taxes on the donations made to the section 8 entity, charitable trusts, or other registered organizations.<\/p>\n\n\n\n<p><strong><em>Following are the mandatory documents required to be submitted for\n80G:<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>Form 10G;<\/li>\n\n\n\n<li>Registration Certificate;<\/li>\n\n\n\n<li>Copy of Utility Bill;<\/li>\n\n\n\n<li>NOC from the landlord;<\/li>\n\n\n\n<li>Copy of PAN Card;<\/li>\n\n\n\n<li>Copy of Trust Deed;<\/li>\n\n\n\n<li>Books of accounts for past\nthree years;<\/li>\n\n\n\n<li>Evidence of welfare activities<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It may be noted that Trust should fulfil underlying eligibility criteria in case the goal is the procurement of funds. A trust should possess a valid trust deed enclosing all the relevant clauses as mentioned above. Kindly write to us in case you need some assistance on <a href=\"https:\/\/corpbiz.io\/trust-registration\"><strong>Trust Registration<\/strong><\/a><strong> under Indian Trust Act, 1882. <\/strong><\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/advantage-of-trust-registration-in-india\/\">Know the Advantage of Trust Registration in India <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A trust can either be public or private. Private trusts operate under the ambit of the Indian Trusts Act 1882. Trust Registration under Indian Trust Act, 1882, renders legal protection for the trustor&#8217;s assets, to ensure those assets are distributed as per the trustor\u2019s intention, and to save time, minimize paperwork &amp;, in some scenarios, [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":37204,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[324],"tags":[2006],"acf":{"service_id":"10"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":13634,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/37115"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=37115"}],"version-history":[{"count":37,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/37115\/revisions"}],"predecessor-version":[{"id":66456,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/37115\/revisions\/66456"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/37204"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=37115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=37115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=37115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}