Trust Registration

Public Trust Formation

The objectives of a public trust are as follows:

• To setup a school or educational institute in order to provide education to the children
• To setup an hospital or nursing home for the providing medical facilities to the poor
• To take care of the old aged, senior citizens, widows, children and the handicapped.
• To promote child and women health and women empowerment. 
• To provide social welfare to the society
• To provide spiritual and other forms of cultural activities
• To provide training for the people belonging to backward or poor classes.

Private Trust Formation

In this type of trust, the beneficiaries are individuals or families. The objects of this type of trust are as follows:

• To provide benefits and welfare to a particular member of the family.
• To manage and preserve a particular property.

The registration of  trust involves the registration of a trust deed. A Trust deed is a document in which the aims, objects and the modes of management of the trust are defined.

Private vs Public Trust 

Indian Trusts Act, 1882 regulates and administers the private trusts in India, whereas the public trusts direct the functioning of public trusts except in the state of Maharashtra and Gujarat where public trusts are governed by Bombay Public Trusts Act, 1950.

Number of Trustees 

There is no upper limit for the trustees in a trust, but a minimum of two trustees are always required for registration. The trust deed should have provision concerning the management of the trust along with the procedure of appointing or removing the members.

Trust Deed           

The trust deed is the most important instrument in a trust, it prescribes the main objectives for which the trust is set up. Apart from the main objects of the trust, it defines its beneficiary and the powers of the trustee. The deed is signed in presence of two witnesses.

Tax Benefit           

Government privileges and tax benefits are not available to a private trust, whereas public trusts after registration with the income tax can avail certain tax exemptions. We are experienced in obtaining necessary income tax registration for tax exemption or benefit.

An application for fresh registration under section 80G will be given to Principal Commissioner or Commissioner. A provisional registration for 3 years will be given to organisations. The registration once granted shall be valid for three years from the Assessment Year from which the registration is sought. Application for renewal of such new registration needs to be submitted

-  at least six months prior to the expiry of validity period or
-  within 6 months from commencement if activities,

whichever is earlier.

The provisional registration so granted shall be valid for a period of 3 years and hence needs to be renewed at the end of the above mentioned timelines. The registration so renewed shall be valid only for 5 years and needs to be renewed at the end of each 5 years. 

Forms and Timelines 

Trusts are created when the settler of the property transfers property or provides benefits for the welfare of beneficiaries or for the usage of public purposes. A Trust formed with the aim to utilise the assets of the Trust to attain well being of public at large and promote a charitable cause is called a Public Charitable trust. Such trust do not have a fixed beneficiary, but the public in large, generally demarcated with common trait. E.g. for a Public trust located in a city the beneficiary may be the illiterate kids in the slums of the city.

The Major elements of the Trust is summarised below

• Author or Settler: One who forms the trust and transfers under irrevocable arrangement the property and its future benefits to the trust.
• Trustee: A body of Individuals who undertake the management and safekeeping of Trust and its property.
• Beneficiary: People who will benefit from the trust.
• Asset or property: of the trust
• Objective: of the Trust
• Trust Deed: defining all relationships, responsibilities, rights, terms and conditions.