Trust Registration

What is a Trust?

Trust: A Trust is an estate planning mechanism by which a person transfers money or property to another for the benefit of a third party. In other words, one person (the settlor) hands over their property or wealth to another person or group of people (the trustees), who manage it for the benefit of beneficiaries.

What is Trust Registration?

Under the Indian Trust Act, 1882 trust Registration is the process of registration of Trust. A trust is a contractual relationship between two persons – the Trustor (the person creating and funding the trust) and the Trustee (the person who holds the trust property and administers the trust for the benefit of others).

There are a variety of reasons in which people create trusts, and they fall under a few categories: Some are for acts of charity, some are to shield family wealth, while others build their trust for religious or social interests. To be sure, many also register trusts for tax benefits under the Income Tax Act, but the bigger objective is typically to benefit society or to shield one’s assets.

Pros of Trust Registration in India

1 – Starting Charitable Activities

One way to work legally for the benefit of society, education, medical or welfare is registering a charitable trust in India. You can explicitly state in your Trust Deed the purposes of your charitable work and this way you can help a larger number of people.

2 – Securing Your Children’s Future

Private Trusts Register A private trust register will protect your money for your children. A private trust, on the other hand, safeguards your assets to ensure that your children have a secure future, and are protected from the vagaries of life.

3 – Tax Benefits

Registered trusts including charitable trusts are provided with tax exemptions under the Income Tax Act (Section 12A, 12AA, and 12AB). The only type of public and private trusts that can save on taxes and use more on welfare purposes.

4 – Helping the Needy

The creation of charitable trusts is frequently for the benefit of the poor or for underprivileged sections of the society. On a registered trust you have a standing, not only legally from the organizations you are able to appeal to, but also to the beneficiaries you can eventually reach out to.

5 – Simple Registration Process

how to register a trust in India? All you have to do is to draft a Trust Deed, collect the necessary documents and apply with the registrar for obtaining the registration certificate.

6  -Protecting Family Wealth

A family trust provides protection and proper disposition of the family assets in an orderly and lawful fashion.

7  – Establishing Religious Institutions

When you want to establish a temple or any religious place, having a religious trust registration will provide you the legal identity and authenticity.

Types of Trust Registration In India

There are two types of Trust Registration in India as follows: 1

1 – Public Trust

1. A charitable or non-profit public trust is usually created. Its main objectives may include:
2. Functioning of schools, colleges and other educational institutions
3. Establishing hospitals or nursing facilities
4. Support to old aged, widows, orphans and physically challenged ellos.
5. Health, Women’s Empowerment, and Social Services agenda
6. Cultural, Spiritual and Religious activities support
7. Training and development in the under-privileged class.
8. Consecrating Temples or organizations
9. Your jobs serve to help the planet
10. Providing the essentials of life (food, water, shelter) to the needy

2 – Private Trust

At the other end, is a private trust that is established for particular individuals or families. Its objectives may include:

1. Family property protection and management
2. Guaranteeing economic gain to specific family members

3 – Public-cum-Private Trust

Such a trust is dual in nature, private as well as public. It is mouldable, and widely used in India.

Trust Deed

The actual document containing the directives that the Trustee follows is called the Trust Deed. No trust can be registered unless a Trust Deed is executed.

Whether you need trust registration in Delhi (or anywhere else in India), we can guide and assist you at each step – from the first draft of a Trust Deed to the final registration procedure.

Punishment of Running Unregistered Trust in India

1. Civil & Criminal Penalties – You could be subject to legal penalties if you fail to abide by your Trust Deed rules.
2. No TAN Account Number – TAN is mandatory and absence of TAN is punishable offence.
3. Default in Income Tax Return Filings – If your trust does not have the registration under Section 12A, they will not enjoy the tax exemption and they will have to file the returns by due date or else you may face penalties.
4. Who all can register Trust in India 2021 -The applicant should be at least 18 years old and logically sound when it comes to registration.

To create a trust, you need to:

1. Adhere to the Indian Trust Act, 1882 and your bylaws
2. Bloggers checking in on members must ensure they have “nothing to hide”.
3. Britten down clearly the beneficiaries (close family in private trust’s case, public in the case of public trust)
4. Ensure registration documents are formatted appropriately

Documents Required for Trust Registration

Details of Trustees:

          Details about name, age, work, address, title, contact details, photos etc

Identity & Address Proof of the Trustees:

          Voter ID / Driving License / Passport etc.

Office Address Proof:

          Electricity Bill / House Tax receipt / Rent Agreement + NOC from landlord

Witnesses & Settlers:

          At the time of registration, there should be 2 witnesses with the settler

Note : These are the documents that will be constant for registering a trust throughout India.

Procedure for Trust Registration in India

1. Select an Original Title for your Trust – It shouldn’t infringe upon the Emblems Act or the Trademark Act.
2. Prepare Trust Deed – Write the objectives, rules & management of the trust.
3. Gather Documents – Assemble all necessary documents.
4. How to Apply Online/Offline – Applications should be sumitted only through online mode to the office of the registrar.
5. Application – Forward it to the authority along with the attached documents.
6. Trust Registration Certificate Download – You will get a download link for your certificate after validation.
7. How GarudaMudra Can Help

With experts at GarudaMudra, we keep things simple for you. We offer:

1. Help preparing documents
2. Online/offline processing of applications
3. Liaising with authorities
4. Correction of application errors

We are One of India’s most reliable consultants for trust registration and well known for on-time hassle-free services.