What is a Trust?  

Trust is governed by the Indian Trust Act. Under this, there is a transfer of a property from its owner to a trust for a lawful purpose. In other words trust is an organization where the owner decides to transfer the right of his property to a second person who is called as trustee.

Who may be trustee?

Every person capable of holding property may be a trustee; but, where the trust involves the exercise of discretion, he cannot execute it unless he is competent to contract.

For the purpose of NGO Registration one needs to make a decision on the following matters:

1. Name and Address of the trust
2. The object of the Trust whether it is for a charitable purpose or for religious purpose
3. Settler of the trust
4. Two trustees
5. Trust property whether it is movable or immovable.

Creation of trust 

A trust is created when the author of the trust indicates with reasonable certainty by any words or acts:

(a) An intention on his part to create thereby a trust,

(b) The purpose of the trust, 

(c) The beneficiary, and

(d) The trust-property,

 And (unless the trust is declared by will or the author of the trust is himself to be the trustee) transfers the trust-property to the trustee.

What is a Trust Deed?

It is an instrument of trust by which trust is declared.  A trust deed has many clauses such as Name clause, registered office clause, settler and trustee clause general body member clause and other rules and regulations.

Process of Trust Registration:

1. Selection of name.
2. Determine the number of trustees for your trust. Minimum 2.
3. Draft Trust Deeds.
4. For registration of trust deed, trustees and author of the trust must be present with the sub registrar office along with 2 witnesses. There must be properly attested copy of trust deed and registration fee also have to be paid.
5. On trust deed registration, apply for PAN and TAN of the trust thereafter apply for a bank account.

Requirements for Trust Registration Deed:

• Trust Deed on stamp paper with requisite stamp duty
• Passport size photograph & Identity Proof of settlor
• Passport size photograph & Identity Proof of two trustees
• Passport size photograph & Identity Proof of two witnesses
• On each page of trust deed, signature of the settlor
• Two witnesses on the trust deed.

What are the benefits of Trust Registration?

Tax exemptions can be granted to the registered trust under section 12A and 80G of the Income Tax Act. It may also be noted that income tax registration is mandatory to avail tax exemptions. It would include the following:

1. Trusts get land from the government
2. Tax benefits
3. 80G certificate benefit
4. Benefit on service tax or income tax

Application for the 80 G Certificate

Following documents are required to be submitted for 80G:

• Form 10G
• Registration Certificate
• Copy of PAN Card
• Copy of Utility Bill
• NOC from landlord
• Copy of Trust Deed
• Books of accounts for past three years
• Copy of Trust Deed
• Evidence of welfare activities.