Registration with the sub-registrar is effectively a way to safe keep your trust deed with the government. The registrar will issue a certified copy of the deed to you that you can use for your day-to-day purposes. If your copy gets lost or destroyed –you can go to the registrar’s office and get another certified copy made. BUT the real registration of a public charitable trust takes place at the Income Tax Department when you apply for tax exemptions under sections 12A and 80G. Here is how it goes: Prepare your trust deed. I strongly recommend that your take services of a good lawyer for this purpose. Then get the trust deed printed on a Rs. 100 stamp paper (i.e. the first page of the deed will be printed on the stamp paper and rest of the pages will be stapled with it.) Execute the trust deed by signing on all the pages. All the trustees will sign on all the pages. Now, obtain form 10A and 10G from the Income Tax Department. You can download these forms from their website as well. Form 10A is for exemption under section 12A and form 10G is for exemption under section 80G. Duly fill these forms and submit these forms along with trust deed to the relevant official in the Income Tax Department’s exemptions office. Within 2-3 months, you’ll receive a clarification notice from the department. You should reply to all the questions and clarifications that the department asks for. Supply relevant documents if they ask for it. Once the tax department is satisfied –you’ll issued the Exemption Certificates. SEE ALSO: Different between Trust and Foundation The above said certificates shall bear a registration number which you can quote as the registration number your trust. Same process for 80G and 12A applies for NGOs registered as Societies. Certificate for exemption under 12A bears the lifetime validity whereas the 80G certificate is valid only up to a period of 1 to 3 years. My readers have contributed a lot of questions on the subject of trust registration in India. I have answered many of these questions in the comments section given below. Please go through all the comments —you may find more clarity on several topics. Also, please do read all my articles on how to register a trust and the process of society registration. You can also read about how trust and society are different from each other. All these articles are properly interlinked. After carefully reading all the relevant material given on this website, if you still have a question —please ask by making a comment. Please write proper English language and give as much details in your question as possible. This enables me and other readers to better understand your question. Please keep your questions only about the registration process. I can not, for example, tell you how to get government grants and donations. So, please do not ask such questions. I hope you found this information useful. In case you have any questions, please feel free to ask. I will try my best to help you. Thank you for using TechWelkin! Thanks for this wonderful Article. We want to open Public Charitable Trust,below is my query: 1.What is the meaning of Settlor. Can a Settlor be one of the Trustee also. 2. What are the tax exemption for Trust as you said u/s 12 A and 80 G tax exemption is for Donor. So do trust also need to pay Tax to Govt.?? What shall I do ,could you please help me for the solution Thanks for the details! I have few queries regarding the same: We have registered the Trust with the Sub-registrar office on 18th of Feb 2016 & we are now in the process of applying for 12A & 80G exemptions. Bank account is also been applied for & we are hoping to get the same in few days time. We have been receiving funds from our known circle from December 2015 onwards in our personal current account & we have been putting it into use for various activities! We have proper bills for the same. My query is that whether it is possible to account this donation money for the Trust even before it was registered. Can the receipts be issued for a prior date before trust registration? I heard that trust can be registered within 3 months to 1 year from the date of incorporation & hence the donations received prior to registration can also be accounted. How does it happen? Please clarify!!! If some person donate the money in my trust a/c more than 20 lac then whether i has to give ans,. to income tax where its come from . I am a Teacher by Profession and I even conduct coaching classes. I teach the Children who are belonging to low income group families and uplift them to be competent in the society. However, I too belong from a Middle Class Family. And so I am required to charge them a notional amount of fees which is also unaffordable to them. To educate this children and after going through your article, I am inspired to start a Public Charitable Trust. However there are two queries which I required you to adhere and comment upon. – Firstly, can I start a Trust with an objective of providing free coaching to the unprivileged children in a rented premises? – Secondly, could I be able to reasonably remunerate myself as you mentioned in the article? I would be a Teacher as well as a Trustee to the aforesaid discussed Trust that I am intending to form. Your light to my issue could help me to bless the unprivileged to come out of darkness of their personal life. Thank you. I request you to answer my query which is still left unanswered. I hope this answers the unanswered queries. Keeping this in mind, I want to setup a completely Non-Profit trust where I will make 0 Rs from the trust and everything goes to the needy. A few questions that I have are:
- What are the requirements to accept funds from sources outside India? Is there a limit on the amount that can be accepted?
- I have been advised to purchase/buy an old trust (or non-functioning trust) because it would save me money on getting the relevant 10G/80G/other certificates and the charter/objectives can be updated to suit the requirements of my trust – is this a good idea?
- A lawyer informed me that setting up a public charitable trust is an expensive affair and would cost me upto a lakh at least to setup! Is this true? Can you give me an estimate of how much it would ideally cost me to open a trust? Appreciate your time and assistance! will a Public Trust registered under “THE INDIAN TRUST ACT, 1882 also allowed to conduct activities ALL OVER INDIA? i.e. Mumbai…? I understand that donations to Trusts are classified in two categories;
- Donations received with specific direction that they shall form part of corpus fund Such donations are exempt 2) Donations received without such specific instruction To claim exemption under category (1), what sort of evidence is required that the donor has given specific direction that the donation shall form part of Corpus fund? The other query is: Is it possible to register the Trust with ITO (Form 12A & 80G) even before registering the deed with sub-registrar? This is to ensure that the contents of the deed is acceptable to ITO for granting exemption.
- You have to register the trust with the sub-registrar first. You can not directly apply for 12A or 80G.
- Is registration procedure same as described in this article? 2. I did a little research and find that here I do not need to go to area sub-registrar but to the Collector, (He will act as registrar). Is it true? 3. Will the trust deed prepared according to you in this article applicable before the collector? Or I need to prepare documents differently? 4. Will a public trust registered under MP public trust act 1951 also allowed to conduct activities all over India? I will appreciate your response. Regards, Thanks for detailed information on the how to register a trust in India. The information is really very good for someone like me who doesn’t know about it much. We are group of friends who were doing charity work since last 3-4 year by giving donation to many other trust. However the fund we collected could distrusted only with individual name through individual bank account etc. Now we would like to start trust and start donating through trust name and more organized way. The hurdle is I am the only person presently working in India and all my other friends are working in abroad (gulf countries). How can I start a trust in this situation? Following are my few question.
- Can register trust able to receive the funds from outside India. If not, the what best we can do. 2. What are documents are required to open a trust bank account. Other than registration copy of trust. 3. Do I need to pay tax on donation received. If I am not getting any interest on the donation. Whether we have to pay tax irrespective of we received interest or not? 4. As we are not directly going to needy persons but we donating the amount to other trust is there any problem in this. 5. I am ready to manage all the things from India. Is there any audit for the trust. 6. We don’t have any registered office. I am planning to give my resident address for the trust registered office. Is there any problem. 7. How much time required to register a trust and start donating or doing charitable work. 8. Is there any legal implementation if the two trust name are same. As we don’t know the name in our mind is already taken by any other trust or not. Looking forward for your valuable inputs. Thanks in advance. Suresh
- No, you can’t get funds from outside until you apply for and get the FCRA certificate. You need to run your trust for three years, and should be able to show some good work done before you can apply for FCRA.
- You would need trust’s PAN card, address proof, signatures of all the trustees. Go to bank and they will tell you their requirements.
- You can apply for 12a certificate, if you get it, you would not need to pay income tax on donations you get.
- I don’t think so.
- Every year, you must get the audit done by a professionally qualified CA.
- No. There is no problem if you’re the owner of your residential property.
- One month if all goes as planned.
- I am not sure about it. But try to pick a unique name. Thx Because my friend’s charity has been opperational for several years, does he need to give any reccords of donations and spending or accounts to the tax department to get the tax exempt status? Also, what is the best way to find a lawyer to do this tax exempt registration? I have been trying to find relevant information on and off from various sources regarding registering and a NGO in the field of education, skill development etc of students and youth. I must say your articles have lifted the shadow of apprehension forming in my mind to go ahead with this initiative. I have gone through some comments and replies and have few queries.
- Bank account has to be opened in the individual name or trust name? 2. As a settlor if i give a loan to the trust can i charge interest on that amount? Also is there any time limit for the loan to be repaid? Thanks in advance. What is your advise on setting up a charity organisation for a person who is willing and is an Overseas Citizen of India? Abhay Thanks for your kind guidance. I have some queries:
- Whether a central goverment emplyee can be a settlor or trustee of a trust? If yes then is it mandatory to inform this to his/her employer? 2. whether the profit can be given to persons who are employed at the trust (except settlor and trustee)?
- Yes, a government employee can be a trustee or settlor, but the Trust’s activities must not be against the government’s stated policies. Otherwise, you may face trouble in your government job. It is better to inform your government office before you join a trust.
- You can keep salaried employees for the Trust’s work and their salary can be paid from the Trust’s funds. You give such employees a reasonable salary and not “profit”. Lalit Can you please let me know what are the pros and cons of setting up a foundation or a trust or both. Thanks Our alumni network decided to help the deceased colleagues family. Instead of contributing money directly to our late-colleague’s family (which would incur a tax liability), we are looking to set up a charitable trust for the needy families of our alumni that suffer death or disability due to an accident. My questions is that can we create a Charitable Trust for a specific set of beneficiaries rather than everyone? The Charitable trust would provide a regular monthly income to the deceased’s family and would look to grow the fund through financial investments for future beneficiaries. We also hope to contribute annually to the Trust to keep the fund going. Please advise. Thanks and regards, Can a trust name of a registered trust can be changed or amended if accepted by all trustees? I read your articles about setting up a trust. I also want to open a trust from the personal fund I have accumulated for the charity purpose. As you have mentioned, there is no need to register the trust. Then what is procedure to set up a trust without getting it registered? At least some kind of documentation will be required to bring the trust into existence. How can I open the bank account on the name of the trust? Regards, Naresh
