What is a Trust?

A Trust refers to an arrangement in which a property is handed over to or vested in a person to be used and disposed off for the benefit of another person. But that is just a legal definition of Trust in India. Let us not understand what Trust is within an Indian context.

What is Trust Registration?

A Welfare Trust Registration, or simply, a Trust Registration, is an entity that exists and is governed with registration under the Indian Trust Act, 1882. Mistakenly known as the Trust Registration Act, 1882). A registered trust is referred to as a legal arrangement within two parties. One party is the beneficiary, and the other is the benefactor. The benefactor holds the power to transfer his assets to the beneficiary as per the contract of a registered trust in India.

Within the legal context of trust deed registration, the benefactor is known as the Trustor, and the beneficiary is known as the Trustee. But why does one opt for establishing a Trust? Is it only to earn the benefits that come with Trust Registration under the Income Tax Act? The answer is both yes and no.

Benefits of Trust Registration in India

1. Establishment of Charitable Undertakings: Starting a charitable trust in Delhi by getting the registration of charitable Trust in India will have to start various charitable endeavors. You can specify in the bylaws the reasons behind the registration of a trust in India, and you will be able to help a lot of people.
2. Children Aid: If you want a secure future for your children, private trust registration in India is something you can work towards. Unlike a public charitable trust registration, it will allow you to become a trustor and carefully manage your assets so your Trustee – your children – can have a secure financial future.
3. Tax Exemptions: Getting Online trust registration, whether it is a public trust registration or a new trust registration online that is private, leads to several tax exemptions. A Trust, in most cases, is considered akin to an NGO. Therefore, public trusts in India can enjoy tax exemptions by registering as Charitable Trusts under the Income Tax Act with registration under section 12A of the Income Tax Act and registration under section 12AA. Furthermore, under special provisions, setting up a trust online and getting Section 12AB registration is also beneficial as far as taxation is concerned.
4. Helping Aggrieved Individuals: A Trust registered under Section 12A helps with Trust Online Registration but also helps the consolidation of a society whose sole purpose is to help the most people.
5. Easy Incorporation: The trust registration process in Delhi doesn’t have any hindrances. The procedure is easy to follow and easier to implement. One merely needs to fill out the trust registration form via the appropriate trust registration format, Go to the Trust registration office in Delhi, and get the registration certificate on time.
6. Familial Wealth Coverage: Registration of a private Trust is considered of utmost importance for those who wish to protect their personal assets in India.
7. Establishing Temples: If you are a devout individual, registration of religious Trust is something you can get into. You can tap into the Temple Trust Registration procedure and establish a society that can consolidate a temple in the future.

Types of Trust Registration in India

Trust Registrations are comprised of two of the following categories:

1. Public Trust Formation: Public Trust is referred to as the Non-Profit Charitable Organization or a Non-Governmental Organization. The objectives of a public trust are as follows:
2. To set up a school or educational institute to provide education to the children
3. To set up a hospital or nursing home the providing medical facilities to the poor

• To take care of the old aged, senior citizens, widows, children and the disabled.

1. To promote child and women’s health and women’s empowerment. 
2. To provide social welfare to the society
3. To provide spiritual and other forms of cultural activities

• To provide training for the people belonging to backward or poor classes.
• To set up temples and other religious activities.

1. To set up associations to protect the environment.
2. To provide the poor with food, shelter, drinking water and other basic amenities
3. Ultimately, Public Registration of Trust in India aims to provide charitable services.
4. Private Trust Formation: In this type of Trust, the beneficiaries are individuals or families. The objects of this type of Trust are as follows:
5. To provide benefits and welfare to a particular member of the family
6. To manage and preserve a particular property
7. Public-cum-Private Trust: A Public-cum-Private Trust is an entity that serves two purposes. The income they generate can be used for public or for private reasons. A trust registered of this type is considered the most versatile in India.
8. Trust Deed: The registration of a Trust involves the Trust Deed Registration. A Trust Deed is a document in which the Trust’s aims, objects and management modes are defined.

We can provide you with all the assistance pertaining to the registration of this entity. Our professionals will ensure that your Trust gets registered at the proper time.

However, just incorporating the Trust is not enough. Once you obtain the trust deed registration certificate, you have to take care of the compliances. If you don’t, you will face a lot of penalties that you cannot escape from:

Penalties for running an unregistered Trust in India

1. Civil and Criminal Penalties: Not following the rules mentioned in the trust deed is considered a contravention of the provisions of the Trust Registration Act. And thus, you will become liable for civil and criminal penalties.
2. Default in acquiring Tax Deduction Account Number: A Trust must obtain the Tax Deduction Account Number. Not doing so is considered a criminal offence per Section 27BB of the Indian Trust Act, 1882.
3. Default in filing Income Tax Returns: Not every Trust is considered to be a Non-Profit Organization. Unless the Trust has the registration under Section 12A of the income tax act, it cannot avail of tax benefits. It means that the Trust is required to furnish the tax returns on time. Not complying with the rules will cause issues for your company.

Eligibility Criteria for Trust Registration in India

To obtain the registration certificate for a Trust, you need to keep in mind the following points:

1. Your Trust should follow the rules of the bylaws.
2. All the members mentioned in your Trust should have a clean record.
3. Your Trust’s purpose should not contravene the Indian Trust Act, 1882.
4. The applicant must follow the precise trust registration format.
5. You must agree never to contravene the rules and regulations of your bylaws.
6. You must specify the beneficiaries in the documents you submit for the Trust Registration application in India. For instance, when you submit an application for family trust registration in India, you must be explicit about the Trustor and the Trustee.

Documents Required for Trust Registration in India

Following are the Private Trust Registration in India

1. Details of the Trustee
2. Name
3. Occupation
4. Address
5. Age
6. Designation
7. Contact Information
8. Photographs
9. Address Proof of the Trustee
10. Voter ID
11. Driving License
12. Passport
13. Proof of Office’s Ownership
14. Electricity Bill
15. House Tax receipt
16. NOC from the landlord in case of rented property
17. Witnesses and Settlers
18. Two witnesses are required at the time of registration.
19. The settler should also be present at the time of registration.
20. In the case of a Charitable Trust Registration, the details shall remain the same. However, the difference will be in the case of the details specified when it comes to the Trustor.
21. Additional Note: The Trust registration documents will remain the same for each state. For instance, the documents required for trust registration in Delhi will be the same everywhere else.

Process of obtaining the Trust Registration in India

Here is the step-by-step process to register a Trust online in India:

1. Choose a unique name for the Trust: Your first task is to give a proper name to your Trust. The online registration of Trust is only possible if the name you choose for your Trust is reliable and as per the standards of the government of India.To form a Trust, your name should not contravene the Emblems act.
   1. The name should not violate the trademark act
   2. The name you choose should be unique
2. Drafting the Trust Deed: Formulate the bylaws of your Trust and put them inside the trust deed.

Documentation

Gather the documents required for Trust Registration. Make sure all the documents are signed from the get-go.

1. Online Application filing: To form a trust online, the applicant must file an online application. Go to the official website of Trust Registration in your state and start filling out the application form.
2. Application Submission: Submit the online application for Trust Registration to the appropriate authority with the requisite documents.
3. Obtain the Trust Registration Certificate: It is not only the documents and registration that the society registrar assesses. It is also the purpose of your Trust. After the analysis, if the registrar deems you worthy, you will obtain the trust registration certificate. 

How can we help you?

BRITSI is a team of leading business professionals who are well-versed in the matters of Trust registration. In addition to answering several questions about what is Trust registration certificate and its rules and regulations, we will provide you with the following services:

1. Document furnishing
2. Application filing
3. Department follow up
4. Aid in the removal of errors in the application form