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Trust Registration In India

If you are thinking about establishing a trust for non-profit or charity reasons, trust registration is essential to guarantee its successful operation and compliance with regulatory requirements. Accubucks Solution has a specialized team of specialists ready to assist you at every stage of the trust registration procedure.


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Trust registration Act in India: Overview, Registration, Process & Checklist

If you are thinking about establishing a trust for non-profit or charity reasons, trust registration is essential to guarantee its successful operation and compliance with regulatory requirements. Accubucks Solution has a specialized team of specialists ready to assist you at every stage of the trust registration procedure.

Although the trusts are irrevocable, they cannot be changed or revoked without the authority of the court. Trust registration may appear to be a lengthy procedure.

Many people believe that trust can only be created by the most powerful people in society. That, however, is not the case! A trust can be established not just by wealthy persons, but also by regular people. Only private trusts are governed by the terms of the Indian Trust Act of 1882 (referred to as "The Act" in this article).

State-specific legislation generally governs public trusts. For example, the Maharashtra Public Trust Act of 1950. Except for the state of Jammu & Kashmir and the Andaman and Nicobar Islands, the Indian Trust Act applies to the whole country of India. Furthermore, the Waqf, religious or benevolent endowments, and a few others are exempt from this statute.

Trust registration

What is a Trust? and trust Parties

Let’s understand this with the help of an example:

Mr. X wishes to transfer ownership of his bungalow (property) to Mr. Y for the benefit of his young granddaughter. Mr X transfers his property to Mr Y because he has faith in Mr Y. This is the essence of a relationship.

A trust is simply a transfer of property from the owner (Mr X) to another person in whom the owner has faith (Mr Y) for the benefit of a third person (Granddaughter of X).

The term "property" refers to more than simply physical estate. It might be money, stock, or another valuable thing. Furthermore, the instrument through which this complete trust is declared/created is known as the "trust deed" or "instrument of trust." 

Trustee Parties

Author/Settlor/Trustor/Donor (Mr X):The person who wishes to transmit his property and places his trust in another to establish the trust.

Trustee (Mr Y): The person who accepts the confidence in order to establish the trust.

Beneficiary (Mr X's granddaughter): The person who will profit in the near future from the trust.

Trust Objectives in General:

The essential goal is that the trust be established for a legal purpose. For example, if Mr. X stole money from a bank and gave it to Mr. Y with the aim of distributing the money to needy children, the trust is null and invalid because the principal purpose is illegal.

So, how can we know whether the intent is legal or illegal? Section 4 of the Act has the answer. Section 4 states that all intents are permissible unless they

  • Is prohibited by legislation

  • Defies the provisions of the law

  • Is it fraudulent?

  • Causes harm to another person or his property

  • Immoral or contrary to public policy 

Who can create a Trust?

A trust can be formed by:

  • Every person who is contract-competent: This includes an individual, AOP, HUF, firm, and so on.

  • If a trust is to be established on or for the benefit of a minor, authorisation from a Principal Civil Court with original jurisdiction is necessary.

Furthermore, it is determined by the applicable legislation at the time and the degree to which the author of the trust intends to dispose of his property. 

Types of Trusts 

Private Trusts: 

A private trust is for a small group of people. In other words, the recipients are identifiable. For example, a trust established for the author's relatives and friends.

Public Trusts:

A public trust is established for a big population, i.e. the general public. Non-profit NGO's Charitable Institutions for the General Public, for example.

Trusts, both private and public:

As the name implies, the Public-Cum-Private Trusts have two goals. They have the authority to pay their revenues for both private and public purposes. This implies that either public or private individuals, or both, might be the beneficiaries of such a trust.

Registration Requirements for a Private Trust:

According to Section 5 of the Act, in regard to:

Immovable property:

A private trust must be established in writing using a non-testamentary instrument. Furthermore, the non-testamentary document must be signed and registered by the author of the trust or the trustee. Registration is not required if the non-testamentary instrument is formed by a will.

Moveable property: 

A trust in respect to moveable property can be declared in the same way as a trust in relation to immovable property can be declared or by transferring ownership of the property to the trustee. As a result, registration is not required.

How to Create a Trust:

By following a few simple steps, you may complete the trust deed registration certificate procedure online with Accubucks Solution. 

The trust's founder, also known as the 'Author of the Trust' or the 'Settlor of the Trust,' is obliged to write down the trust's goals and the procedure by which its trustees will endeavor to achieve them. This is the initial stage in the trust's registration. A trust deed, often known as a deed of trust, is the document that contains all of these facts.

Following that, a trust deed registration and an online trust registration application must be submitted to the Registrar of Trusts. The trust is frequently established in the appropriate legal framework for registering the registered department of the trust.

What Does a Trust Deed Include? 

The trust deed is the most crucial and vital document of the trust. It summarizes the objective, its responsibilities, and how it will operate until it is closed down. The following clauses are included in the trust deed.

  • The entire scope of trust

  • The registered office of the trust

  • The functioning area of the trust

  • Trust objectives

  • Details about the author and his assets

  • Board of Trustees membership information, including qualifications, terms, and tenure

  • Governing the permission and obligations of trustees and other trustees

  • Closure, trust deed improvement, and petition under the Act

What are the benefits of Trust Registration

Establishment of Charitable Organizations

By establishing a charity trust in India, one can engage in a variety of humanitarian activities. You may help a lot of people by expressing the reasons for the trust's registration in India in the bylaws.

Children's Assistance

If you want to guarantee the future of your children, private trust registration in India is the finest alternative, and you can easily register online by utilizing private trust registration online.

Exemptions from taxes 

Online trust registration provides tax advantages. In general, a trust is similar to an NGO. As a result, public trusts in India are eligible for tax benefits if they register as charitable trusts under Sections 12A and 12AA of the Income Tax Act.

Individual Support

A trust created in accordance with Section 12A facilitates trust online registration as well as the consolidation of an organization with the primary purpose of assisting as many people as feasible.

Easy Integration

The procedure of creating an online trust is straightforward. The operation is really simple to carry out. Simply fill out the trust registration form in the appropriate format. Contact Accubucks Solution to begin the process.  

Family Asset Protection

In India, forming a private trust is seen as critical for anyone seeking to protect their own property.

Setting up Temples

Trust registration online allows you to create an entity that can eventually amalgamate a temple through the temple trust registration process.

Trust Registration Online Process:

  • In India, registering a trust is a pretty basic and uncomplicated process. The first stage is to choose the sort of trust you want to foster. In India, there are two sorts of trusts: private trusts and public trusts.

  • Individuals often establish private trusts for the benefit of their family or themselves, whereas public trusts are established for the benefit of the entire public.

  • Once you've decided on the sort of trust you want to establish, the following step is to give it a name

  • The name should represent the trust's purpose and must be authorized by the Registrar of Companies.

  • The following stage is to appoint trustees.

  • Trustees are in charge of administering the trust's affairs and ensuring that it functions in line with its aims.

  • You must choose at least three trustees, all of whom must be natural beings (not corporations or other legal bodies).

  • After you have picked trustees, you must prepare the trust deed. The trust deed is a legal document that outlines the rules and regulations that govern the trust's functioning. It must be signed and registered with the Registrar of Companies by all trustees.

  • The final stage in establishing a trust is funding it. This can be accomplished by making a monetary donation to the trust or by moving assets such as real estate or stock into its name.

  • Your trust will be registered and operating once you have completed all of these processes.

The Trust's Constitution:

The Trust establishes the Board of Trustees. The Board is made up of the following individuals:

  • The trust's creator, settlor, and author.

  • Management trustees

  • Additional Trustees

  • The quorum of the Board of Trustees cannot exceed 21 individuals. 

Why Register a Trust?

Every state's Public Trust Act requires the registration of a trust if it has a charitable purpose or when land is transferred in the trust's name. Only registered trusts are permitted to engage in the above-mentioned transaction for tax insurance under Sections 12A and 80G of the Income Tax Act. Because it includes the giving of public monies, trust registration strengthens the validity of the same.

Compliance with Trust:

Following registration, a trust must execute the activities listed below:

  • Get a PAN card.

  • Accounting and Bookkeeping 

  • Annually File ITR

  • Registration of Shops and Establishments

  • Tax registration for professionals

  • Continue with GST Registration if applicable. 


Documents Required for Trust registration  Services:

  • Trustee documentation​

    • Name of the trustee

    • Employment

    • Address

    • Contact Information

    • Photographs

    • Government recognised address proofs

  • Evidence of Office Ownership

    • Electricity Bill

    • Home Tax receipt

    • NOC

  • Witnesses and Settlers

    • Two witnesses are expected to sign during registration

    • The migrant should also be existing at the time of enrollment


FAQs on Trust Registration Services 

Question: What is the 12A section for trust?

Answer:Section 12A of the Income Tax Act of India requires trusts and institutions to be registered in order to qualify for tax benefits under Section 80G. It is required for trusts seeking tax advantages. 

Question: What is the purpose of a trust deed?

Answer: A trust deed has a number of provisions, including a name clause, a registered office clause, and other rules and regulations.

Question: Who might form trusted?

Answer: A trust can be established by a single person (the settlor) or by a group of people (the trustees) for a legal purpose with specific beneficiaries.

Question: What are the prerequisites for registering a trust?

Answer: To register a trust, you'll need a trust deed, trustee data, and compliance with local legislation, which can vary depending on where you live. Specific criteria should be discussed with legal specialists or authorities.

Question: How does a trust get registered?

Answer: A trust deed that specifies the trust's aims, trustees, beneficiaries, and rules is often required to register a trust. The settlor and trustees must sign and execute the deed. Depending on the jurisdiction, it should subsequently be registered with the local Sub-Registrar or the Charity Commissioner's office.

Question: How many people are in a trust?

Answer: A trust's membership might vary, but there must be at least two trustees. The maximum number of trustees, if any, may be specified in the trust deed. 

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