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A Trust can either be a private trust or a public charitable trust.

Private trusts are governed by the


Indian Trusts Act (1882) and are used for private purposes, such as running a private estate or
institution. Privates trusts are not given any tax benefits by the Government of India.
If you want to do some charitable work for public you can set up a public charitable trust.
India does not have a national level law to govern charitable trusts. However, a few of the states
have enacted Public Charitable Trusts Act (Like Bombay Public Trusts Act, 1950)
Trusts are registered using a document called TRUST DEED. This document contains all the
information about the Trust and is printed/written/typed on plain A4 size papers. Along with
these papers you would need to attach a Rs. 100 Non-Judicial stamp paper (which you can get
from a notary). All the Trustees and witnesses will have to give thumb impressions and
signatures on these papers. All in all, you will need help of a notary to prepare the papers.

You may also need a no-objection certificate (NOC) from the owner of the property where the
registered office of the trust is to be situated. If youre the owner of the property, then you dont
need to worry about NOC

Following elements must be mentioned in the trust deed
o Name and address of the Settler (Settler is the person who is setting up trust)
o Name(s) and address(es) of the other trustees
o Name of the trust
o Minimum and maximum number of trustees your trust can have
o Address of the registered office of the trust
o Objectives of the trust
o Rules and Regulations of the trust

For registering a trust you need minimum two trustees (i.e. one settler and another
person). You can decide the maximum number of trustees and this number must be
mentioned in the trust deed. All the trustees together are called Board of Trustees. This
board collectively governs the trust.
Unlike societies, in case of trusts all or some of the trustees can be related persons (i.e.
they may belong to the same family)
All the trusts are allowed to work on all India level
Trusts are irrevocable unless it is mentioned in the trust deed. This means that the trust
cannot be wound up
Trustees are usually life-long members or their tenure is specified in the deed. Electoral
process is not involved in the appointment of trustees.
Board of Trustees can also have various designations for trustees. Common designations
are Chairperson and Managing Trustee
Trustees cannot draw any remuneration from the trust fund. However, they may take
reasonable compensation for the professional services they provide to the Trust.
Profits earned by the Trust (e.g. interest gained from bank) cannot be distributed among
the trustees.
Trust Deed can be amended through a Supplementary Trust Deed.
Most important part of the Trust Deed that you should pay special attention to is
objectives of the trust. You should be as thorough as possible in writing down trust
objectives so that you can function smoothly without any problems.
At the time of registration, only the Settlor and two witnesses are required to be present
in front of the Sub-registrar under whose jurisdiction the registered office address comes.
Sub-registrar will check IDs of these people. After that the Trust Deed will go to the
counter where data entry takes place. In the end, Settlor and two witnesses will be
photographed. You will need to pay a fee of Rs. 1100 for this process. Of this amount,
Rs. 100 will be the registration fee and Rs. 1000 will be the charges of keeping a copy of
the Trust Deed with the sub-registrar.
After about one week of submitting the papers, you can go back to the registrars office
to receive a certified copy of the Trust Deed.
Other Important Points
Trust income is exempted from income tax. Bu to avail this facility, after registration,
you need to acquire a certificate from the Income Tax Department. This certificate is
called u/s 12A
Donations to the public charitable trusts are also exempted from tax (i.e. the donor will
not have to pay tax on the amount he donates to the trust). For this, you need to acquire
80G certificate from Income Tax Department.
Usually lawyers and practicing CAs can help you in registration of trust but I guess a
lawyer is better person if you need help in formulating your Trust Deed. CAs dont know
the nitty-gritty of the legal stuff.
If you can write your own trust deed and sure that you have done a good job then all
you need is the help of a notary who will take your Trust Deed and prepare it for
presentation before the Registrar.
After registration of the Trust, for acquiring 12A and 80G certificates, you may need to
take services of a practicing CA. They charge hefty fee for these services.
SEE ALSO: An important update on this article on registering a trust NGO
SEE ALSO: How to apply for 80G Exemption
If you need more information regarding this matter, you may comment on this article. Although I
try to answer questions as much as possible, but I will suggest that you do research on your own
as well. Also I request readers to reply to questions, if you know the answers. Lets help each
other by sharing knowledge!