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Trust Registration

Indian Trust Act 1882 defines the Trust as an organization where the owner (trustor) decides to transfer the right of his property to a second person called trustee so that the third person (beneficiary) can take the benefit out of it.

  • You are required to fill your details in our online questionnaire.
  • Collect the Prerequisites details
  • We will assist you in gathering the prerequisite documents
  • We will compile a trust deed
  • The trust deed so compiled will be submitted to the relevant local Registrar for f. NGO registration
  • Once your Trust NGO is registered, we shall send you Trust Deed via courier.
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Overview of Trust Registration

Trust registration begins with the drafting of a trust deed. Trust deed is the first requirement in the process of trust registration. Trust Deed is formed on the non-judicial stamp paper, every state has fixed its own rate on stamp duty. Book an appointment with the sub-registrar office once you are done with the trust deed. It is essential for all the trustees to appear before the sub-registrar on the appointment date along with the trust deed and two witnesses.

What is a Trust?

Indian Trust Act 1882 defines the Trust as an organization where the owner (trustor) decides to transfer the right of his property to a second person called trustee so that the third person (beneficiary) can take the benefit out of it.

Such a property is moved by the trustor to the trustee alongside a declaration that the trustee should hold the property for the recipients of the Trust.

Trust is classified into two categories:

Trust is classified into two categories
  • Public Trust

    Public trust is created to provide benefit to the public at large, thus beneficiaries in the case of public trust is general public at large. Public Trust is further subdivided into two parts:

    1. Public Charitable Trust

    2. Public Religious Trust

  • Private Trust

    Often families or individuals are beneficiaries in the case of private trust. Private trust is further subdivided into two parts:

    1. Private Trusts whose recipients and their imperative offers both can be resolved

    2. Private Trusts whose both or either the recipients and their imperative offers can't be resolved

12A and 80G Certificates

Income Tax Department issues 12A certificate to the trusts or NGOs. Any trust that has 12A certificate is not liable to pay Income tax for the entire lifetime on its surplus income.

Additionally, a NGO must acquire 80G certificate. This certification gives the donor a permission to avail the benefit of deduction at the time of making donation. Thus, you can say deduction is offered to the donors under section 80G of the Income Tax Act.

Legislation Pertaining to Trust

A Trust is represented by Indian Trusts Act, 1882 across India. Though, each state can detail its own Trusts Act to administer such non –profit organizations in its own state.

Further, a Trust can get assets and activities much like a Society. Nonetheless, it’s very challenging to get assets or ventures following a Trust get enrolled.

It is necessary for a trust to meet certain eligibility criteria if the trust is interested in obtaining funds or projects. Criteria can be anything such as relevant experience, performance of a Trust, its age and other such parameters.

Trust Registration

Benefits of Trust Registration

The reason behind creating any trust is to indulge in charitable activities and at the same time avail the benefit of tax exemption. These charitable trusts are also called non-profit organization.

A trust has to be a legal entity if it wants to avail all the benefits of the trust offered by the government. Trust Act and Federal laws makes it mandatory for such entities to get registered under Charitable Trust.

Trust Deed is necessary to register a charitable trust. Hence, charitable registration is also called trust deed.

The Federal and State Law Departments in the India give an assortment of assets to manage the charitable associations and the common people. This procedure hugely helps those donors who want to lend their assets to the trusts, making them trustees fully expecting receiving tax benefits.

At the time of charitable trust registration it is necessary that you are aware of some fundamental knowledge related to trust registration and the fees payable at the time of registration. Explicit laws like the Trust Act 1882 have been proclaimed, and application form has been endorsed to encourage the procedure of registration.

Documents Required for Registration of Trust

Documents-Required-for-Trust-Registration
  • Trust Deed is the primary most important document which you will require at the time of Trust Registration. Trust Deed contains the following information:
  • Motive of the Trust
  • Information of the Settler and trustees like Name, Age, Father’s Name, Address, Occupation, Mobile Number, Email Address, Designation
  • Total number of Trustees
  • Address of the registered office of the trust
  • Rules and regulations that the trust will follow
  • Proposed name of the Trust
  • A copy of identity proof of the settler and trustee
  • Passport size photograph of the settler and trustee
  • Presence of the Settler along with original identity proof and two witnesses at the time of registration. Some states have made presence of trustee mandatory as well.

Income Tax Formalities

Once you have done a valid trust registration, the next step for you to follow is to go for 12A and 80G registration so that you can avail the benefit of tax exemption. Form 10A is used to file an application for the registration.

In the event that where the total pay of the trust or establishment without offering impact to the provisions of Section 11 and 12 surpasses 50,000/ - in any earlier year, the records of the trust or foundation for that year must be inspected by a chartered accountant or some other bookkeeper qualified for be selected as an evaluator of organizations. The report of audit ought to be in Form No. 10B recommended in the Income-charge Rules, 1962 and said review report must be outfitted alongside the return of income.

Must know things before Trust Registration

  • Private vs Public Trust

    Private Trusts in India are regulated and governed by Indian Trusts Act, 1882, on the other hand public trust themselves control their functioning except in the state of Maharashtra where Bombay Public Trusts Act, 1950 governs the functioning of public trusts.

  • Number of Trustees

    There is no maximum limit define for the number of trustees but atleast two trustees are always required at the time of trust registration. The trust deed ought to have arrangement concerning the administration of the trust alongside the strategy of delegating or removing the members

  • Trust Deed

    Trust registration cannot be done without the most important document called trust deed. It explains the reason behind the existence of the trust. The document also contains the list of its beneficiary and narrates the power of trustees. Minimum two witnesses are required at the time of deed signing process.

  • Tax Benefit

    After the registration process public trusts can enjoy the privileges offered by government. Public trusts are also eligible to avail the benefit of tax exemption.

Trust Registration Process

  • Selection of Name

    Select a unique name for your trust, the name should be new and must not lead to any infringement.

  • Drafting of Deed

    The trust deed should be drafted wherein the gatherings to the deed will be settlor (creator of the trust deed), the trustee and the recipient.

  • Trust Registration

    A trust deed is a document which contains all the crucial information related to registration and must present it before the registrar of the trusts having jurisdiction.

  • PAN, TAN and Bank Account

    The final step in the process of registration is to apply for allocation of PAN number and TAN and afterwards apply for a bank account.

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Frequently Asked Questions

Registration of a Trust is necessary from two edges:

It is legitimately not important to have a composed trust deed for the beneficent trust/strict trusts, social orders and organizations. From the practical perspective, however, it is constantly fitting for charitable trusts to have a legitimate enlisted trust deed.

The reason for which an open trust can be made is the advantage of overall population, and the equivalent must be obviously endorsed in the trust deed, as it manages its working throughout time. By and large an open trust is made for setting up a school, universities, other instructive activities, clinic, mature age homes, halfway house, for advancement of kid wellbeing and their strengthening, government assistance of more fragile segment of society, and for satisfaction of Corporate Social Responsibilities (CSR) by organizations under area 135 of the Companies Act, 2013.

  • Trust Deed is the primary most important document which you will require at the time of Trust Registration. Trust Deed contains the following information:
  • Motive of the Trust
  • Information of the Settler and trustees like Name, Age, Father’s Name, Address, Occupation, Mobile Number, Email Address, Designation
  • Total number of Trustees
  • Address of the registered office of the trust
  • Rules and regulations that the trust will follow
  • Proposed name of the Trust
  • A copy of identity proof of the settler and trustee
  • Passport size photograph of the settler and trustee
  • Presence of the Settler along with original identity proof and two witnesses at the time of registration. Some states have made presence of trustee mandatory as well.

For trust registration the trust deed doesn't require a particular accreditation from any expert specialists for trust registration, nonetheless, you may require our administrations for appropriate drafting of the trust deed, in getting the meeting with the recorder of trusts and operational help while being available in the enlistment center office for registration of trust deed.

A trust commonly includes three parties – a settlor, otherwise called the creator of the trust, a trustee and a recipient. A trust gets made when the settlor hands over any property to the trustee to be utilized and utilized to serve the recipient. This legitimate course of action is classified vide a trust deed.

  • Selection of Name

    Select a unique name for your trust, the name should be new and must not lead to any infringement.

  • Drafting of Deed

    The trust deed should be drafted wherein the gatherings to the deed will be settlor (creator of the trust deed), the trustee and the recipient.

  • Trust Registration

    A trust deed is a document which contains all the crucial information related to registration and must present it before the registrar of the trusts having jurisdiction.

  • PAN, TAN and Bank Account

    The final step in the process of registration is to apply for allocation of PAN number and TAN and afterwards apply for a bank account.

The registration of Trust or Trust Deed Registration is a one and same thing and each state have endorsed an unmistakable claim for trust registration. Accordingly, there is no uniform trust registration form to enlist a trust. The essential reports to enlist a trust is the trust deed and KYC records of its creator, trustee and observer of the trust deed.

A private trust which has versatile property just shouldn't be enrolled. Notwithstanding, a private trust with unfaltering property should be enrolled under the Registration Act, 1908. Data on private trusts isn't openly accessible, except if such trusts have been enlisted.

A trust deed is a conventional report laying out the gatherings associated with a trust and the guidelines for conveying trust property to recipients. Just a revocable trust can be revised once made. Changes can be made distinctly during the trust grantor's lifetime.

Public Trust

Public trust is created to provide benefit to the public at large, thus beneficiaries in the case of public trust is general public at large. Public Trust is further subdivided into two parts:

  • Public Charitable Trust
  • Public Religious Trust

Private Trust

Often families or individuals are beneficiaries in the case of private trust. Private trust is further subdivided into two parts:

  • Private Trusts whose recipients and their imperative offers both can be resolved
  • Private Trusts whose both or either the recipients and their imperative offers can't be resolved

A Trust is represented by Indian Trusts Act, 1882 across India. Though, each state can detail its own Trusts Act to administer such non –profit organizations in its own state.

Further, a Trust can get assets and activities much like a Society. Nonetheless, it’s very challenging to get assets or ventures following a Trust get enrolled.

It is necessary for a trust to meet certain eligibility criteria if the trust is interested in obtaining funds or projects. Criteria can be anything such as relevant experience, performance of a Trust, its age and other such parameters.

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