Trust Registration is done in India by the Trust Act, 1882. The Trust Act, 1882 defines a Trust as “an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another or of another and the owner. In simple words it is a transfer of property by the owner to another for the benefit of a third person along with or without himself or a declaration by the owner, to hold the property not for himself and another.” In India, majority of the Trusts are registered as public charitable trust a form of not-for-profit entity. Public Charitable Trusts can be established for a number of purposes, including the social service, education, healthcare, provision of facilities for recreation, and any other object of general public welfare. In this article, we look at the process for Trust Registration in India:
A Trust can be created by any person in India who is competent to contract, having in his/her power any property with is transferable. The person creating the Trust is called the Settlor and the person to whom the property is transferred on trust is called a Trustee. The person for whose benefit the property is transferred is called the beneficiary.
If the property to be transferred to the Trust is immovable, then the Trust must created by the execution of a Trust Deed that is duly registered. In case the Trust is created by the transfer of a movable property, then the Trust can be created by the property owner himself orally or in writing declaring that he would hold the property, not as owner, but as a Trustee for the benefit of some other person(s).
Usually the Trust Deed is the document that establishes the registration of the Trust and usually details items such as:
- Name of the Trust
- Place of office of the Trust
- Objects of the Trust
- Number of Trustees
- Term of the Trustees
- Trust Management
- Appointment or Resignation or Termination of Trustees
- Power, Function and Duties of the Trustees
- Application of Trust Property
- Other important matters
The Trust Deed must be executed on Stamp Paper of suitable value and singed by the settlor and two witnesses. Once the Trust Deed is executed, it can be registered with the Local Registrar. The Registrar would then register the Trust, retain photocopy of the Trust deed and return the original registered Trust Deed back to the settlor.
Online Trust Registration – Form 10A
The Central Board of Direct Taxes has issued a notification no. 10/2018-Income Tax dated 19.02.2018. Through the said notification, CBDT has substituted entire rule 17A which deals with application for registration of charitable or religious trusts, etc. Under this article we would look at the applicable procedure of trust after implication of notification no. 10/2018-Income Tax.
As per notification no. 10/2018-Income Tax, an application, under section 12A, for registration of charitable or religious trust or institution shall be made online by filing application in form 10A. The CBDT vide the said notification has made the procedure for
obtaining registration of trust online.
Document Required for Trust Registration
Following documents are required for filing online form 10A –
- If the trust is created, or the institution is established, under an instrument, than in such case, self-certified copy of the instrument creating the trust or establishment of the institution is to be submitted;
- If the trust is created, or the institution is established, otherwise than under an instrument, than in such case, self-certified copy of the documents evidencing the creation of the trust or establishment of the institution is to be submitted;
- Self-certified copy of registration with the Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be;
- Self-certified copy of the documents evidencing adoption or modification of the objects, if any;
- Where the trust or institution has been in existence during any year or years prior to the financial year in which the application for registration is made, than in such case self-certified copies of the annual accounts of the trust or institution relating to such prior year or years is to be submitted;
- A note on the activities of the trust or institution needs to be submitted;
- Self-certified copy of existing order granting registration under section 12A or section 12AA; and
- Self-certified copy of order of rejection of application for grant of registration under section 12A or section 12AA, if any.