Dear friends, we Indians are very emotional in nature and social welfare activities are an integral part of our society. Every Indian want to do social welfare activity and also do the same according to own financial capabilities and availability of time. In past years, corporate houses do the social welfare activities voluntarily like construction of schools, hospitals, dharmsalas etc, now the Government of Indian has made it mandatory for big corporate houses doing the business above the threshold limit to do the social welfare activities in the form of CSR (Corporate Social Responsibility).

In many cases, these Corporate houses establish their own Social welfare institute which may be in the form of Society/Trust/Section 8 company or they may distribute the CSR Fund to external NGOs to do social welfare activities on their behalf. In my earlier articles I have written on Society Registration -Procedure & Compliances. In today’s article, I will discuss about the Trust Registration – Procedure & compliances along with sources from where they can raise funds.

In India, there are 2 types of Trust are created, Private Trust and Public Trust. Private Trust is governed by Indian Trusts Act, 1882 and there is no as such law to govern the Public Trusts in India. The bye laws of Public trust are treated at par with Act which can governs the Public Trust. While drafting the Trust deed adequate attention must be given that all mandatory clauses like irrevocability clause, appointment and removal of trustees, activities that can be done in the Trust and clause that authorise governing body to make necessary changes in Trust deed to achieve the goal of trust creation must be there. As explained earlier, as there is no specific law in case of Public trusts, a small drafting error in trust deed may create a problem in near future.

Now, we will discuss about, How the Trusts are created in India and documents required for Registration purpose

In practical situation, we require at least 2 persons while creating a trust. (Settler and Trustee). The Settler will introduce the initial corpus fund to start the trust activities. Following documents are required to be registered with Sub registrar of the area which you will show as registered office of the Trust. Required documents are: –

√ Trust Deed

√ KYC of Settler and Trustee

√ Witness

√ Address proof of Registered Office Like Rent Agreement with Electricity Bill

After registration of your Trust Deed with Sub- registrar (In some states Charity Commissioner) you can apply for PAN Card of your Trust. After receiving of your Trust PAN Card, you can open Bank account.

Registration that must be acquired after creation of Trust

√ Registration U/s 12AB and Section 80G of Income Tax Act, 1961

√ NGO Darpan Registration

√ E Anudaan Registration

√ FCRA Registration

√ Form CSR-1 Registration with MCA

 Compliances that Must be done after Trust Creation

As explained earlier, bye laws of Trust are like a governing act for Public Trust and in almost all Trust deed below compliances are written as mandatory compliances, so these must be fulfilled

√ Conduct of Board Meeting and General Meeting

√ Governing Body members has to ensure that activities of Trust must be according to Trust Deed and no funds of Trust be used for Personal benefits of Trustee or their family members

√ Audit of Books of accounts on annual basis from a Chartered Accountant

√ Filing of ITR before due date so that benefits of Section 11 and 12 of Income Tax Act can be availed

√ Keep a record of all Minutes of Governing body and Annual General meeting of Members

√ Maintenance of Books of accounts as required by Section 12AB, 80G and FCRA Act

√ Filing of TDS Returns and donors return from whom donations are received U/s 80G before due date and issuance of Certificate to them

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This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s person experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persist kindly intimate us to avoid such error for the benefits of others readers.

The Author can be reached at mail [email protected] and Mobile/Whatsapp – 9911303737/ 9716118384

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Qualification: CA in Practice
Company: Shiv Kumar Sharma & Associates
Location: Delhi, Delhi, India
Member Since: 03 Dec 2018 | Total Posts: 69
My Self CA. Shiv Kumar Sharma. I am a member of "The Institute of Chartered Accountants of India" since 2012. I have Qualified my B.Com (H) in 2010 And Cleared CS- Executive Exam in June 2013. Currently, I am in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. View Full Profile

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