Trust Registration

Overview

Trust Registration is the legal process of formally constituting a trust in India by executing a trust deed on stamp paper and, where required, registering it with the local Sub-Registrar (or the Charity Commissioner in states that have such an authority). A trust is an arrangement in which a settlor (author of the trust) transfers property to trustees, who hold and manage it for the benefit of named beneficiaries (a private trust) or for the public at large (a public charitable or religious trust).

Private trusts are governed by the Indian Trusts Act, 1882, while public charitable and religious trusts are governed by state-specific laws (for example, the Maharashtra Public Trusts Act) and general trust principles. Registration is essential for an NGO, family or institution that wants legal recognition, the ability to hold property in the trust's name, and access to income-tax benefits.

Trust registration is typically needed by people setting up charitable, religious, educational or welfare institutions, as well as families creating a private trust for succession or asset planning. A registered trust can subsequently apply for 12A/12AB and 80G registration under the Income Tax Act to claim tax exemption and offer donors deductions.

Benefits

Registering a trust offers several legal, financial and operational advantages:

• Legal recognition: A registered trust is a recognised legal arrangement that can hold property, open bank accounts and enter contracts in the trust's name.
• Tax exemption: A charitable or religious trust registered under Section 12A/12AB can claim income-tax exemption on income applied to its objects.
• Donor benefits: With 80G registration, donors can claim a deduction on their contributions, encouraging fundraising.
• Eligibility for grants: Registration (along with 12A/80G) is generally required to receive government grants, CSR funds and institutional donations.
• Perpetual existence: A trust can be created in perpetuity, allowing the activity to continue beyond the lifetime of the founders.
• Asset protection and succession: A private trust helps manage and protect assets and provides for an orderly transfer to beneficiaries.
• Credibility: A registered trust enjoys greater trust among donors, partners and the public.

Eligibility Criteria

The broad eligibility conditions for forming and registering a trust in India are:

• Minimum trustees: A trust generally requires at least two trustees; there is no fixed upper limit. The settlor (author) and trustees must be competent to contract.
• Settlor (author): Any individual, group of individuals, or legal entity capable of owning property can create a trust by transferring property to it.
• Lawful object: The purpose of the trust must be lawful. Charitable trusts must be created for purposes such as relief of the poor, education, medical relief, religious purposes or other objects of general public utility.
• Trust property: There must be identifiable trust property (movable or immovable) transferred to the trust.
• Beneficiaries: A private trust must have certain, identifiable beneficiaries; a public charitable trust benefits the public or a section of the public.
• Trust deed: A written trust deed clearly stating the objects, beneficiaries, trustees and management rules is required.

How to Apply

Getting your Trust Registration done through TaxoSure is simple and fully online. Just follow these steps:

1. Visit TaxoSure. Go to taxosure.com and open this Trust Registration service page.
2. Login or Register. Create your free TaxoSure account, or log in if you already have one.
3. Upload your documents. Your KYC documents (PAN & Aadhaar) are auto-filled from your account; simply upload the remaining documents for Trust Registration as per the checklist.
4. Submit your application. Submit your Trust Registration request in one click.
5. Consultant connects with you. Our consultant connects with you on WhatsApp / Call to confirm the details, share the pricing and begin the work.
6. Get your registered Trust. Our experts complete the entire process and deliver your registered trust deed and certificate to you.

Stamp duty and exact procedures vary from state to state, as per the applicable state laws.

Compliance Requirements

After registration, a trust must meet ongoing legal and tax obligations:

• Maintain books of account: Keep proper records of income, expenditure, assets and donations.
• Income tax return: A charitable or religious trust claiming exemption files its return in Form ITR-7 within the prescribed due date.
• Audit: An audit is required where the total income (before exemption) exceeds the threshold specified under the Income Tax Act, with the audit report furnished in the applicable form (Form 10B/10BB).
• 12AB registration renewal: Registration under Section 12AB is granted for a fixed term and must be renewed by applying within the timeline prescribed under the current law.
• Donation reporting: Trusts with 80G registration must report donations (e.g. in Form 10BD) and issue donation certificates as required.
• State filings: Public trusts in states with a Charity Commissioner must file accounts and changes (such as change of trustees) with that authority.
• FCRA (if applicable): Trusts receiving foreign contributions must comply with the Foreign Contribution (Regulation) Act and file the related returns.

Thresholds, forms and due dates apply as per current government norms.

Documents Required

Only PAN Card and Aadhaar Card are mandatory; the rest are optional.

• PAN Card
• Aadhaar Card
• Address proof
• Passport photographs
• Signed trust deed (on stamp paper)
• PAN application for trust
• Registered office address proof (title deed / lease / NOC)
• Trust assets details (movable / immovable)
• DSC

FAQs