Trust Registration

Last Updated On: April 26, 2019, 12:07 p.m.
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Trust Registration

Registration of trust for a non-profit is well known and Trust can be formed by 2 or more people for a social cause. In this article, we will discuss the checklist and documents required for trust registration.

What is the Trust Registration?

Trust is registered and governed by the Indian Trust Act. In simple word, it is a financial vehicle which transfers property from its owner to a trust for the lawful purpose. Normally we hear the word trust for religion purpose; however, there is no such restriction. There are even sports academies registered as trusts.

In India, some societies are registered as a public trust. Often, you’ll even hear of the wealthy creating private trusts; this is done because of the tax-efficient nature of the trust (dividend distribution tax or minimum alternate tax do not apply). It is the easiest way to transfer than making a will. However, it does much involve more effort to register a trust than to write a will.

Documents required for Trust Registration

  • The details of trustees like Name, Occupation, Address, Age, Father’s Name, Designation, Mobile Number, Email Address and Two Photograph are required.
  • Address Proof of Trustee & Settler required: – Voter I.D / Driving license / Passport.
  • Electricity Bill or House Tax Receipt or Water Bill Receipt or Ownership Proof of Property required.
  • In the case of Rented, Rent Deed duly notarised with rent receipt and NOC form Land Lord on Rs 10/- Stamp Paper. Name of Landlord, Father’s name, Residence Address.
  • Physical Presence of Settler/all required at the time of Registration along with Original ID.
  • Physical Presence of Two witnesses with original ID Proof at the time of Registration.

 

Steps to Register the Trust

1. Preparation of the Trust Deed

The first step is to draft the Trust deed. Trust deed is nonmandatory but is desired as it is enforceable by law. The following details should be mentioned in Deed:

  • Name and address of the Settler (Settler is the person who is setting up the trust)
  • Name(s) and address (es) of the other trustees
  • Name of the trust (minimum 3 preference shall give)
  • Minimum and maximum number of trustees
  • Address of the registered office of the trust
  • Objectives of the trust
  • Rules and Regulations of trust.

Parties to the trust

Three parties are required to form the Trust.

 Applicant /Author of the trust

The author is the person who declares confidence in the Trust. The Name & Address of the author shall be mentioned in Deed.

 Details of trustees / Members

The trustee should not be a minor & be of sound mind. Mention full Name, Address, Occupation & Age, and designations of the Trustees / Members.

The beneficiary of the Trust

A person who is going to be benefitted by the formation of trust. Usually, Author himself is the Beneficiary or it is public at large.

Objects of the Trust

Trust can be formed for charitable purposes only. The detailed objective of Trust shall be incorporated indeed.

Subject matter

The subject matter of the trust is the property in respect of which the trust has been created. The subject matter shall be defined and property of trust shall be capable of disposition to create a valid trust.

Registration of the trust by Trust Deed

After preparation of Trust now another step is to register the Trust deed. NGO Registration is not compulsory but is needed to get the trust registered under the Income Tax Act for availing the exemptions and more over a deed is a prima facie evidence of the existence of a trust. The trust deed shall be submitted to the local registrar along with the one photocopy and settler shall sign all the pages.

Name of the Trust

Give at least 3 options in the order of preference of name of a Trust.

Address for correspondence & Evidence

Recent electricity Bill/ Telephone Bill/ Property Card of the Trust location.

Tenure of Trustees

Tenure shall fix a minimum 1 year to a maximum of 5 years.

Application for 80G and 12A certificate for tax benefits

After valid trust registration, one shall go for 12A and 80G registration to get the Tax advantage.

 

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