Advantages of Trust Registration

The fundamental motive behind the establishment of any trust is to actively engage in charitable endeavors while simultaneously reaping the advantages of tax exemptions. These benevolent trusts are commonly referred to as non-profit organizations, reflecting their altruistic nature.

Upon establishment, a trust assumes a legal entity, granting it access to a range of government-endowed benefits. It becomes imperative for such entities to undergo the process of registration as per the Charitable Trust guidelines laid out in the Trust Act and Federal laws.

In India, the collaborative efforts of the Federal and State Law Departments have established a comprehensive framework to oversee and regulate charitable organizations and their interactions with the general public. This streamlined process greatly aids potential donors who wish to contribute their assets and properties to trusts, thus assuming the role of trustees and subsequently availing tax benefits.

During the registration of a charitable trust, a fundamental understanding of the key aspects related to trust company registration is essential. This includes insights into the registration procedure and the associated fee structure. Specific legislative acts, such as the Trust Act of 1882, provide a clear framework for this process. The prescribed application forms have been meticulously crafted and endorsed to guide and expedite the registration procedure.

Trust Registration process in India

In adherence to 'The Indian Trust Act, 1882', the ensuing documents hold indispensability for the trust registration process:

1. Proof of Address: A document such as a water or electricity bill that explicitly states the address requiring registration.

2. Identity Proof of Members: Identity proof of a minimum of two members of the entity is mandated. Acceptable identity proofs include:

   • Driving License
   • Voter ID
   • Aadhaar Card
   • Passport

Upon payment of the stipulated registration fee, the online trust registration process commences, following the guidelines established by the Indian Trust Act – 1882. The completion of this process typically spans 8 to 10 days.

Prior to the universal validity of the legal document, an applicant is required to make a presentation at the respective registrar's office. This final step ensures the comprehensive legality of the registered trust across the entirety of the nation.

Stepwise Registration Process for NGO Trust registration

Income Tax Formalities: Following a valid trust registration, the subsequent step involves pursuing 12A and 80G registrations to become eligible for tax exemption benefits. The application for registration utilizes Form 10A. If the annual payment or fee of the trust or establishment exceeds 50,000/- without falling under the provisions of Section 11 and 12, an audit report and statement of records must be evaluated by a qualified chartered accountant or a designated auditor. This report, along with the audit records, should be furnished alongside the income tax return in Form No. 10B, in compliance with Income Tax Rules, 1962.

Essential Considerations before Trust Registration

Private Vs Public Trust: In India, the regulations for Private Trusts are guided by the Indian Trusts Act, 1882. Public trusts, except in Maharashtra, function autonomously. In Maharashtra, the Bombay Public Trusts Act, 1950 governs their operations.

Number of Trustees: While there's no specific upper limit for the number of trustees, a minimum of two trustees is mandatory for trust foundation registration. The trust deed must encompass details about the administration, membership procedures, and strategies for delegation or removal of members.

Trust Deed: The core of trust registration lies in drafting the pivotal document known as the trust deed. This document outlines the trust's purpose, beneficiary details, and trustees' rights and responsibilities. A minimum of two witnesses is required during the trust deed signing process.

Tax Benefits: Upon completing the registration, public trusts are entitled to exclusive government benefits. Tax exemption advantages are also extended to eligible public trusts.

Step 5: Online Charitable Trust Registration Certificate is issued. Upon the successful culmination of the Trust NGO registration process, you will receive the duly registered Trust Deed via courier.