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A Trust, as defined under Section 3 of the Indian Trusts Act, 1882, is a legal entity where the Trustor transfers property to the Trustee for management according to the terms of the Trust Deed. To maintain its legal status, a Trust must meet its Trust Annual Compliance requirements, which include adhering to regulatory obligations and ensuring timely submissions.
All registered Trusts in India are governed by the Indian Trusts Act, 1882, which mandates strict compliance with its provisions. Beyond registration, fulfilling Trust Annual Compliance obligations is crucial for maintaining legal validity and avoiding penalties. These obligations involve submitting necessary documents, following applicable regulations, and ensuring transparency in operations. Regular compliance not only prevents legal issues but also enhances the Trust’s credibility and smooth functioning.
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A Trust is a legal arrangement where property is transferred by the owner (Trustor) to a Trustee for management. Defined under Section 3 of the Indian Trusts Act, 1882, this law governs all registered Trusts in India, ensuring they comply with the required legal provisions.
In addition to registration, fulfilling annual compliance for trust is essential to maintain legal standing and avoid fines or penalties. These compliance requirements, which must be met periodically, play a vital role in ensuring the smooth functioning and credibility of the Trust.
The benefits of annual compliance for trust are as follows:
Given below are the individuals and entities that require Trust annual compliance in India-
The following essential documents are required for filing trust annual compliance in India:
The step-by-step procedure for registration of trust in India is as follows::
Name of The Trust
The applicant must first choose an appropriate name that complies with the relevant acts and provisions such as Trademarks, Copyrights Act, intellectual Property Rights Act etc.
Settlers of the Trust
Determine the individuals who shall act as settlers of the trust. Though there is no maximum limit of a number of trustees, a minimum of two trustees is required.
Preparation of MoA for the Trust
The applicant must prepare a MoA (Memorandum of Association) outlining the objectives and purposes for which trust is established.
Drafting of a Trust Deed
The applicant must draft a trust deed a legally binding document to be presented to the registrar.
Submission of Deed to the Registrar
This is the stage where the trust deed needs to be submitted along with the necessary documents to the registrar.
Grant Trust Registration Certificate
The registrar after reviewing the documents submitted and overall satisfaction shall grant a trust registration certificate. Subsequently, a bank account shall be opened in the trust's name.
The list of different types of trust in India that require Trust annual compliance is as follows:
A Public Trust is created for a large group, typically the general public. Examples include non-profit NGOs and charitable institutions that serve the public interest.
A Private Trust is established for a specific, closed group of individuals. The beneficiaries are identifiable, such as when a Trust is created for the friends and relatives of the author.
This is a trust that consists of both public and private purposes. The income from the trust is used to benefit the public and specific individuals or families.
The list of annual compliance for private trusts is as follows:
Private Trusts in India are required to comply with the provisions of the Indian Trusts Act, the Income Tax Act (IT Act), its Rules and Regulations, and other relevant legislation. The general Trust Annual Compliances include the following:
If the overall income of a Trust exceeds the prescribed threshold for non-taxable income under the Income Tax Act, 1961, the Trust must undergo a compulsory audit by a Chartered Accountant (CA).
If the overall income of a Trust exceeds the prescribed threshold for non-taxable income under the Income Tax Act, 1961, the Trust must undergo a compulsory audit by a Chartered Accountant (CA).
After the audit, the Trust must file the Audit Report in Form No. 10B along with the Annual Return of Income under Form ITR-7.
After the audit, the Trust must file the Audit Report in Form No. 10B along with the Annual Return of Income under Form ITR-7.
Trusts receiving foreign contributions must submit a report to the Secretary, Ministry of Home Affairs (MHA), Government of India, certified by a CA, including the Income and Expenditure Statement, Receipts and Payments Account, and Balance Sheet. If no foreign contributions are received, a "Nil" report must be submitted.
Trusts receiving foreign contributions must submit a report to the Secretary, Ministry of Home Affairs (MHA), Government of India, certified by a CA, including the Income and Expenditure Statement, Receipts and Payments Account, and Balance Sheet. If no foreign contributions are received, a "Nil" report must be submitted.
If the annual income or receipts from Trust property exceed Rs. 1 crore, the Trust must publish its accounts in a newspaper.
If the annual income or receipts from Trust property exceed Rs. 1 crore, the Trust must publish its accounts in a newspaper.
Trusts with GSTIN must file GST returns either monthly or quarterly, depending on their applicable requirements.
Trusts with GSTIN must file GST returns either monthly or quarterly, depending on their applicable requirements.
If a Trust deducts tax at source (TDS) on salaries paid to employees, it must issue TDS certificates and file quarterly TDS returns, within one month of the financial year's closure.
If a Trust deducts tax at source (TDS) on salaries paid to employees, it must issue TDS certificates and file quarterly TDS returns, within one month of the financial year's closure.
The due date for filing ITR for trusts under Trust annual compliance are as follows:
| S. No | Particulars | Descriptions |
|---|---|---|
| 1. | Trust annual compliance in income tax | Typically, the due date for filing the ITR for Trusts is on the 30th of September of the assessment year. |
| 2. | Other forms | Forms like FORM No. 10B, 10, 3CD are more or less concurrent to the due date of filing ITR. Non-compliance will lead to a legal penalty. |
The checklist of annual compliance for private trusts is as follows:
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Written by Aarya Pokharel. Last updated on Nov 11 2025, 09:49 PM
Aarya Pokharel brings 3 years of solid experience in legal research and compliance. Her expertise spans tax filing, secretarial compliances, and advisory services, with a strong focus on delivering precise legal research and strategic advisory support.
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