Trust Registration
- ✔ Legal recognition for charitable or religious activities
- ✔ Enables eligibility for 12A and 80G tax exemptions
- ✔ Allows acceptance of donations and grants lawfully
- ✔ Builds credibility with donors, banks, and government agencies
- ✔ Simple registration process with low compliance
- ✔ Ensures transparent governance and asset protection
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Trust Registration
Introduction
A Trust is one of the oldest and most reliable forms of non-profit organization in India, established under the Indian Trusts Act, 1882 (for private trusts) or the Charitable and Religious Trust Act, 1920 (for public trusts).
It is created when a settlor (founder) transfers property or assets to trustees to be used for a specific charitable, educational, religious, or social purpose.
Trusts are ideal for individuals or groups who wish to promote welfare, education,
healthcare, or spiritual objectives without seeking profit.
Why You Should Register
Registering a trust provides a legal framework to manage charitable assets and operations effectively. It ensures:
• Legal recognition to receive donations and manage funds
• Eligibility to apply for 12A and 80G tax exemptions under the Income Tax Act
• Transparency and accountability in fund utilization
• Protection of trust property and continuity beyond the founder’s life
• Credibility with CSR donors, government grants, and foreign funding agencies
Compliance and Taxation
• Governed by the Indian Trusts Act, 1882 or respective state trust laws (e.g., Maharashtra Public Trusts Act).
• Registration under 12A exempts the trust’s income from taxation.
• 80G registration allows donors to claim tax deductions.
• Annual filing of Income Tax Return (Form ITR-7) is mandatory.
• Audit is compulsory if the total income exceeds the prescribed limit (usually ₹2.5 lakh).
• Must maintain proper accounts, minutes, and donation registers.
Other Registrations Required
| Registration Type | Purpose |
| PAN (Trust) | For income tax compliance |
| 12A Registration | Income tax exemption for trust income |
| 80G Registration | Tax deduction for donors |
| FCRA Registration | For accepting foreign donations |
| GST Registration | If trust provides taxable services |
| Bank Account | For managing donations and expenses |
When You Should Convert
A Trust may be converted into a Section 8 Company or Society when:
• You require higher regulatory credibility and transparency
• You want to expand operations across multiple states
• You need corporate status for grants, FCRA, or CSR eligibility
Documents Required
- 1PAN Card and Aadhaar of settlor and trustees
- 2Passport-size photographs of trustees
- 3Proof of registered office address (utility bill, rent agreement, NOC)
- 4Trust Deed on stamp paper (value as per state laws)
- 5Proof of property ownership (if applicable)
- 6ID proofs of witnesses (2)
- 7Details of charitable objectives and beneficiaries
For More Information
Advantages and Limitations
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Easy and inexpensive to registerEasy and inexpensive to register
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Eligible for 12A and 80G benefitsEligible for 12A and 80G benefits
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Suitable for charitable and religious activitiesSuitable for charitable and religious activities
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Enjoys donor and CSR trustEnjoys donor and CSR trust
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Low annual compliance cosLow annual compliance cos
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No central regulatory authorityNo central regulatory authority
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Less transparency compared to Section 8 CompanyLess transparency compared to Section 8 Company
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Trustees have limited liability clarityTrustees have limited liability clarity
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Difficult to make structural changes laterDifficult to make structural changes later
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Not ideal for multi-state operationsNot ideal for multi-state operations
Comparison
| Parameters | Trust | Society | Section 8 Company |
|---|---|---|---|
| Governing Law | Indian Trusts Act, 1882 / State Acts | Societies Registration Act, 1860 | Companies Act, 2013 |
| Minimum Members | 2 Trustees | 7 Members | 2 Directors & Shareholders |
| Legal Status | Not a separate legal entity | Separate legal entity | Separate legal entity |
| Liability | Limited to trust property | Limited | Limited |
| Tax Benefits | 12A & 80G | 12A & 80G | 12A & 80G |
| Audit Requirement | Based on income | Based on income | Mandatory |
| Compliance | Low | Moderate | High |
| Fundraising | CSR and donations | CSR and donations | CSR, grants, and FCRA |
| Perpetual Succession | Yes | Yes | Yes |
| Cost of Formation | Low | Moderate | Moderate |
| Best Suited For | Charitable/religious causes | Cultural or educational NGOs | Large-scale NGOs and CSR entities |
FAQs
What is a Trust?
A Trust is a legal arrangement where the settlor transfers assets to trustees to be used for charitable, educational, or religious purposes.
How many people are required to register a Trust?
Where is a Trust registered?
Is a Trust eligible for income tax exemption?
Can a Trust receive foreign donations?
What is the difference between 12A and 80G registration?
Is annual audit mandatory for a Trust?
Can a Trust be dissolved or converted?
Need Help?
If you have any questions or need assistance with proprietorship registration, feel free to contact us.
Contact UsWhy Choose ARK Advisor for Proprietorship Registration?
ARK Advisor is your trusted partner for all business registration needs. Our team of experienced Chartered Accountants provides comprehensive support, ensuring a smooth and hassle-free registration process.
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