Trust Registration in India, Trust Ngo Registration in India

Introduction to Trust Registration in India

Trust registration in India is an essential legal process for organizations aiming to work for social causes, charitable purposes, or public welfare. Trusts in India can be categorized into two types: public and private. Public trusts are established for the benefit of the public, while private trusts are set up for specific individuals or groups. This comprehensive guide will walk you through the process of trust registration in India, detailing each step to ensure your trust is legally recognized and can operate smoothly. CA ADDA provides professional trust registration services in India, assisting you at every step of the way.

What is a Trust in India ?

A trust in India is a legal arrangement in which one party, known as the trustee, holds and manages property or assets for the benefit of another party, known as the beneficiary. The person who creates the trust is called the settlor. Trusts can be created for various purposes, including charitable, religious, educational, and private purposes.

Types of Trusts in India

Private Trusts: These are created for the benefit of one or more individuals. They are governed by the Indian Trusts Act, 1882.

Public Trusts: These are created for the benefit of the public or a section of the public. They are governed by state-specific laws in addition to the Indian Trusts Act, 1882.

Steps for Trust Registration in India

Before starting the registration process, decide whether you want to establish a private trust or a public trust in India . This decision will influence the legal requirements and governing laws applicable to your trust. CA ADDA can help you determine the appropriate type of trust based on your objectives and requirements.

Select a unique name for your trust in India . Ensure that the name does not infringe on any existing trademarks or violate any laws. The name should reflect the purpose and mission of the trust. CA ADDA can assist in verifying the availability and appropriateness of the trust name.

The trust deed in India is a legal document that outlines the objectives, structure, and functioning of the trust. It serves as the constitution of the trust and must include the following details:

Name and address of the settlor (creator of the trust)
Name and address of the trustees
Name and address of the beneficiaries
Objectives and purpose of the trust
Description of the trust property and assets
Powers and duties of the trustees
Rules for managing the trust
Procedures for appointing and removing trustees
Conditions for altering or dissolving the trust

CA ADDA provides expert assistance in drafting a comprehensive and legally sound trust deed.

Appoint a minimum of two trustees who will manage the trust's affairs. Trustees should be individuals of good character and integrity, as they will be responsible for the trust's operations and decision-making. CA ADDA can guide you in selecting suitable trustees and ensuring they meet all legal requirements.

Once the trust deed is prepared, it must be printed on non-judicial stamp paper of appropriate value. The value of the stamp paper varies from state to state. CA ADDA can help you procure the correct stamp paper and ensure all legal formalities are met.

The trust deed must be signed by the settlor and the trustees in the presence of two witnesses. Ensure that all signatures are made in the same sitting. CA ADDA provides support in organizing the execution of the trust deed in India , ensuring all parties are present and the process is completed correctly.

To register the trust deed, follow these steps:

Visit the Sub-Registrar's Office: Locate the sub-registrar's office in the area where the trust's registered office is situated. CA ADDA will guide you to the appropriate office and assist with scheduling an appointment if necessary.
Submit Required Documents: Submit the following documents to the sub-registrar:
- Trust deed (original and two photocopies)
- Photographs of the settlor and trustees
- Address proof of the settlor and trustees
- Identity proof of the settlor and trustees
Pay Registration Fees: Pay the prescribed registration fees. The fee amount varies from state to state. CA ADDA can help you understand and pay the required fees.
Witness Signatures: Ensure that the witnesses who signed the trust deed are present at the time of registration. CA ADDA will ensure that all necessary parties are available.
Receive Registration Certificate: Once the trust deed is registered, the sub-registrar will issue a registration certificate. This certificate serves as proof of the trust's legal status. CA ADDA will assist in obtaining and securely storing this certificate.

After registering the trust, apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the trust. These are required for tax compliance and financial transactions. CA ADDA provides services to facilitate the application and acquisition of PAN and TAN for your trust.

Open a bank account in the name of the trust. The trustees will be authorized signatories for the account. Use this account for all financial transactions related to the trust. CA ADDA can assist in choosing a suitable bank and completing the necessary formalities to open the trust account.

Registered trusts can apply for various tax exemptions under the Income Tax Act. Some of the common exemptions include:

Section 12A: Provides exemption from paying income tax on the surplus income of the trust.
Section 80G: Allows donors to claim deductions for donations made to the trust.
Section 10(23C): Provides exemptions for educational institutions and hospitals.

CA ADDA can guide you through the application process for these tax exemptions, ensuring all necessary documentation and compliance requirements are met.

After registration, trusts must adhere to ongoing compliance and reporting requirements, including:

Annual Filing: Filing annual returns and financial statements with the relevant authorities.
Income Tax Filing: Filing income tax returns and ensuring tax compliance.
Periodic Audits: Conducting regular audits of the trust's accounts and operations.

CA ADDA offers comprehensive compliance and reporting services, ensuring your trust remains compliant with all legal and regulatory requirements.

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Introduction to Trust Registration in India

What is a Trust in India ?

Types of Trusts in India

Benefits of Registering a Trust in India

Steps for Trust Registration in India

Step 1: Decide on the Type of Trust

Step 2: Choose a Name for the Trust in India

Step 3: Prepare a Trust Deed in India

Step 4: Appoint Trustees

Step 5: Draft the Trust Deed on Stamp Paper in India

Step 6: Execute the Trust Deed in India

Step 7: Register the Trust Deed in India

Step 8: Obtain PAN and TAN for the Trust

Step 9: Open a Bank Account

Step 10: Apply for Tax Exemptions

Step 11: Compliance and Reporting

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