The sole purpose of trusts is to promote non-commercial activities. The activities must take place in the field, promoting arts, science, education, and environmental development. Therefore, it is essential to register a trust in India to reap the following benefits.
- Ensure the activity conducted on behalf of the trust is properly regulated.
- Developing and promoting socially beneficial activities.
- For 12A and 80G income tax benefits, trust registration is required.
- Each public trust must act in the best interests of the public to promote the development of trust.
- In order to conduct trust business legally, this license is required.
- In order to develop various sectors of society.
How is Trust Registration regulated?
Private trust registrations are regulated by the Trusts Act, 1882. The Registrar of Trusts maintains all the information regarding the trusts in India.
trust registration process in different states is governed by separate state acts. An applicant must be aware of these state acts. Registration of trusts in Bombay is governed by the Bombay Public Trust Act. The state authority (if applicable) must register public trusts in India.
Trusts are regulated by the following laws:
- The Trusts Act of 1882
- The 1961 Income Tax Act
- 1860 Societies Registration Act.
Trust Registration Criteria
In order to register a trust, the following criteria must be met:
- In order to form a trust, two or more persons must be involved.
- Under the Indian Trusts Act of 1882, the trust must be formed.
- Under Indian law, the parties cannot be disqualified.
- A trust’s objectives cannot violate any Indian law.
- Trustee practices must be fair.
- Public interest or any other law must not be compromised in the formation of the trust
- There must be no injury to anyone as a result of any trust activities.
- It is forbidden for the trust to conduct activities contrary to its memorandum.
- A trust deed must express the true interests of the parties forming the trust and be properly drafted.
- When there are more than two purposes of creating a trust, both purposes must be valid. If one purpose is valid and another is invalid, trust cannot be formed.
FAQ For Trust Registration
Is it possible to form a trust in India?
A trust can be formed in the following ways:
- Contracts may be signed by anyone who is competent to do so
- Upon consent of the original civil court of jurisdiction, by or on behalf of the minor
- Families without division in Hinduism
- AOP (Association of Persons)
- Woman-owned trust
- An organization
- In the name of a Trust, can a PAN card be issued and a bank account opened?
A separate PAN card and bank account can be opened in the name of a Trust, since Trusts are registered entities with a separate legal identity.