Trust Registration in India: Process, Fees & Documents

Trusts are considered as formal arrangements that are crafted to manage assets and properties for the benefit of the beneficiaries or for charitable purposes. In India, the trusts are governed by the Indian Trust Act of 1882 for the private trusts and for public trusts, the respective State Public Trust Act is applicable. Charitable trust registration not only makes the trust legally compliant and enhances the credibility of your organization but also enables you to work within the periphery of applicable laws.

Depending upon the objectives of the trust, you can also be required to obtain a PAN, TAN, 12AB Registration, 80G Registration, or any other statutory registration after registering the trust.

According to media reports and tracking metrics of NPO DARPAN portal there are 2,98,466 trusts under active non-profit entities registered with NITI Aayog and 49.86% operate as Trusts.

It is a legal process of creating and registering a trust through a Trust Deed that is going to be executed by the settlor and trustees. The registration establishes documentary proof of your trust and then helps it own property. The trust can then open bank accounts, receive donations and carry out its objectives.

Public trust registration confers legal recognition to the trust deed and sets the relations between the settlor, trustees, and beneficiaries. It enables transparency and makes banking, income tax payments, management of property, and other legal registrations easier for charity or non-profit trusts.

In case you want to establish a non-profit organization according to the Companies Act instead of a trust, you can apply for Section 8 Company Registration.

Some of the distinct advantages of registering are:

Legal Recognition

An officially registered trust will have documentation confirmation of its operations based on the objectives of the Trust Deed.

Greater Credibility

Availability of the trust registration certificate increases the confidence of benefactors, beneficiaries, commercial and state authorities.

Management of Property

The trust is able to own, control, and manage properties under its control through its trustees in accordance with the Trust Agreement.

Bank Transactions and Acceptance of Donations

The trust may open a bank account and accept donations for its operations.

Sustainability

The trust is able to operate according to the Trust Agreement despite the changes in trustees.

The individuals listed below have the right to establish a trust:

• Individuals

• Family members

• Groups of people

• Charitable organizations

• Religious organizations

• Educational institutions

• Social welfare institutions

The specific eligibility is determined by the purposes of the trust and the applicable legislative requirements as in the corresponding State laws.

In different States, different authorities are responsible for the trust registration online. Usually, the registration is carried out at the office of the Charity Commissioner or Registrar, depending on the applicable State legislation. If you are going to establish any membership-based nonprofit organization, you can get the Society Registration. It will help you legally operate and register your organization.

Generally speaking, the documents needed for registering the trust include:

• Trust Deed

• PAN and the identity document of the settlor

• Identity documents of the trustees

• Address proof of the trustees

• Passport-sized photographs

• Proof of registered office address

• Utility Bill

• Rent Agreement or proof of ownership

• NOC from Property owner, if it is required

• Other necessary photos of all the parties

The required documents for trust registration may vary according to the states and their laws. The type of trust and the purpose also plays a factor on the documents required.

The trust registration process includes various steps that you need to follow like trust deed , you have to appoint trustees then submit documents and then the process ends with registering the trust to the authority.

Step 1: Write the Trust Deed

As the first part of the new trust registration process, you must write a Trust Deed. In this document you list the name of the trust and what the trust intends to achieve. It is necessary to include the names and facts regarding the person who creates the trust plus the people who manage it. For the rules of the trust, you describe what the managers are allowed to do and what they must do. And you provide information about the people who receive benefits from the trust.

Step 2: Choose the Trustees

To manage the trust according to the deed, you select the necessary individuals. When you register, those people must provide documents that show who they are and where they live so that officials can check them.

Step 3: Organize the Necessary Documents

For the registration, you gather all the trust registration documents required, those papers are the Trust Deed, documents that prove identity but also documents that prove where people live. It is also required to provide proof of the official office location and photographs. By following the rules of the local office, you include any other papers they ask for.

Step 4: Send the Registration Application

To complete registration of trust online, you deliver the application, the Trust Deed and the extra papers to the official office. Due to different rules in each state, you perform this task either through the internet or offline.

Step 5: Check the Documents

Before the office agrees to the registration, the officials look at the Trust Deed as well as the supporting papers. At this time they also check the identity of the individuals involved.

Step 6: Pay the Required Fees

Under the laws of the specific state, you pay the money that the government requires for registration. On top of the fees, you pay the tax for the official stamps.

Step 7: Get the Registration Certificate

If the check is successful, the office provides the trust registration certificate that confirms the trust is registered.

The length of time that you need to wait for the trust registration process in India depends upon document preparation, execution of the Trust Deed, and the processing time of government offices.

The expected timeline is:

The trust registration fees in India depend on various factors, government charges and professional fees.

Note: Apart from the professional fees you may need to pay other charges like government registration charges and stamp duty fees. They may differ from one state to another. You can contact Companyregister.co.in for the latest fee structure.

Not complying with the provisions pertinent to public charitable trust registration may result in penalties under a specific State law or tax laws. Failure to maintain records, wrongful use of trust property, and various failures to comply with the statutes can influence the legal standing of the trust and its right to receive certain benefits.

Some of the Penalties you may face are:

• Tax Exemption is lost if 85% of income is not allocated to charitable initiatives.

• Registration Cancellation: Identified infractions might cause 12AB or 80G certification cancellation.

• Tax After Exit (Accreted Tax): 12AB registration cancellation might involve tax liability for trust’s assets according to section 115TD.

• Default in Filing Form 10BD: Missing the deadline of May 31 for the issuance of donor’s forms leads to issues related to 80G deductions for donors and sanctions.

• If cash donations are made in amounts of INR 2 lakh or more in accordance with section 269ST guidelines, you may have to pay a fine equivalent to 100% of the cash donation.

• If you fail to maintain records or accounts are not submitted regularly fines can be imposed.

• If you get caught selling, leasing, or mortgaging trust property without obtaining approval can result in invalidation of contracts and also penalties.

• Cancellation of FCRA registration

Once all the verification is done you get your registration done. The government issues the trust registration certificate. This is now the legal proof you require to prove the existence of your trust. It is required for important activities like opening a bank account, getting PAN, or applying for tax registrations and to complete other statutory compliances.

Generally, a registered trust is existing according to the Trust Deed and the laws that are applicable to it. Registration on its own does not need to be renewed appropriating to the period prescribed under certain state laws, nor does it need to be renewed if mandated.

Following the new trust registration online, you will be required to adhere to the necessary rules and regulations such as the following:

• Maintenance of accounting records

• Income tax return filing

• PAN and TAN compliance

• Compliance with Section 12AB and 80G of the Income Tax Act

• Proper maintenance of trust documents and records

• Adhering to relevant State Trust laws

In cases where the trust expects to receive foreign contributions, the necessary permission under the Foreign Contributions (Regulation) Act, 2010 will be required.

Once the registration of private trust in India has been accomplished, amendments may be made to the trust’s details whenever needed. Amendments that are usually made include those related to the Trust Deed, trusteeship, the office of the trust, the objectives of the trust, and additions or deletions as applicable. The amendments will have to be validated according to the Trust Deed and will have to be made before the competent authority as prescribed under the law.

The Trust registration laws usually do not require a registered trust to undertake renewal procedures concerning its registration. However, the trust in question may have obtained certain registrations like 12AB Registration, 80G Registration, or some other statutory approvals which may impose renewal or revalidation requirements under the law.

Renewal process

The procedure for renewal of trust registration depends on the registration or approval that needs renewal. In instances when renewal becomes applicable, a person is expected to file an application as prescribed along with necessary documents with the authority concerned within the prescribed time.

Renewal fees

There is no standard charge for renewal online trust registration in India because the Trust registration itself generally does not require any periodic renewal. However, in case of some other statutory registration and compliance-related services in connection with renewal, professional fees may become applicable.

If the trustees decide to dissolve the trust, such termination should take place strictly in line with terms of the Trust Deed and the relevant State laws. Before termination, all liabilities need to be settled by the trustees, statutory compliance must be concluded, and the trust property must be distributed or transferred according to the aims

Application for register a trust in India can get no acceptance or delayed due to the reasons mentioned below:

• Trust Deed not properly prepared

• Wrong identity or address proof

• Documents missing

• The Trust Deed could not be signed properly.

• The required stamp duty amount is not paid as necessary.

• Trustee details wrong.

• Lack of compliance with the state-wise rules and regulations

We provide trust registration India services in states like Maharashtra, Delhi, Tamil Nadu, Gujarat, Karnataka, Uttar Pradesh, Rajasthan, West Bengal, Jharkhand, Haryana, Bihar, and others. Our team assists users online in drafting Trust Deed and carrying out formalities related to registration and post registration compliance.

We assist all kinds of trusts such as:

• Trusts for charitable purposes.

• Educational Trusts.

• Trusts for religious activities.

• Trusts doing health services.

• Family trusts.

• Trusts for public service.

• Environmental Trusts.

In case you do not want to set up a trust and want to start a non-profit company, you can go for NGO registration in India as per your requirements.

Our experienced team of trust registration consultant at Companyregister.co.in provides complete assistance for trust formation across India. Our team helps you to prepare a Trust Deed, verify the required documents, submit the application, other formalities and ensure total compliance with the state laws.

You can set up a charitable, religious, educational or family trust, we provide end to end support. You get post registration support from us. It makes your journey smooth and efficient.