Trust Registration in India

A Trust can be established by any person in India who is competent to contract and possesses any transferable property. The person who establishes the Trust is known as the Settlor, and the person to whom the property is transferred on trust is known as the Trustee. The beneficiary is the person to whose benefit the property is transferred.

If the property to be transferred to the Trust is immovable, the Trust must be established through the execution of a properly registered Trust Deed.If the Trust is formed through the transfer of movable property, the Trust can be formed orally or in writing by the property owner himself declaring that he will hold the property not as owner, but as a Trustee for the benefit of another person (s).

Trust Deed Registration

The Trust Deed must be executed on suitable Stamp Paper and signed by the settlor and two witnesses. The Trust Deed can be registered with the Local Registrar once it has been executed. The Registrar would then register the Trust, keep a copy of the Trust Deed, and return the original registered Trust Deed 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.

Trust Registration process in India

For the trust registration under 'The Indian Trust Act, 1882”, the following documents are mandatory:

  • A bill of water or electricity mentioning the address which needs to be registered.

  • The identity proof of minimum of two members of the entity. The identify proof can be:

  • Driving License

  • Voter ID

  • Aadhaar Card

  • Passport

  • After paying the fee for the registration process, it takes around 8 to 10 days for online trust registration as per the norms of the Indian Trust Act – 1882.

  • Before the legal document becomes valid all around the country, the applicant has to submit a presentation at the corresponding registrar’s office.

Advantages of Trust Registration

The purpose of establishing a trust is to engage in charitable activities while also benefiting from tax exemption. A charitable trust is also known as a non-profit organization.

Trust becomes a legal entity, and it is entitled to all of the government's trust benefits. The Trust Act and federal laws require such businesses to be registered as Charitable Trusts.

In India, the Departments of Federal and State Law provide a variety of resources to manage and regulate charitable organizations and the general public. This procedure greatly assists those donors who wish to donate their property and assets to trusts by appointing them as trustees, which provides tax benefits.

During the charitable trust registration process, you must understand and know some fundamental knowledge related to trust company registration and the amount of fee at the time of enrollment. Explanatory laws, such as the Trust Act of 1882, have been announced, and an application form has been certified and endorsed to recommend the registration procedure.

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