Trust Registration in India: Complete Guide

What Is a Trust?

A trust is a legal arrangement in which a person (the settlor or author) transfers property or assets to another person (the trustee) for the benefit of a third person or group (the beneficiaries). Trusts in India are primarily governed by the Indian Trusts Act, 1882 (for private trusts) and various state-specific Public Trusts Acts (for public/charitable trusts).

Trusts are widely used in India for charitable, religious, educational, and social welfare purposes. They offer a flexible legal framework for philanthropy, estate planning, and community development without the formalities required for company incorporation.

Types of Trusts

Trust vs Society vs Section 8 Company

Documents Required for Trust Registration

• Trust Deed: The foundation document defining the trust's objectives, management structure, and operational rules. Must be executed on non-judicial stamp paper of appropriate value.
• Identity Proof: PAN cards and Aadhaar cards of all trustees (minimum 2).
• Address Proof: Utility bill, rent agreement, or ownership deed of the registered office.
• Photographs: Passport-size photographs of all trustees.
• NOC from Landlord: If the registered office is rented.
• Objectives: A clear statement of charitable/religious objects in the trust deed.

Step-by-Step Trust Registration Process

Step 1: Draft the Trust Deed

Prepare a comprehensive trust deed that includes:

• Name and address of the trust
• Names and addresses of the settlor and all trustees
• Objects and purposes of the trust
• Trust property (initial corpus/contribution)
• Powers and duties of trustees
• Procedure for appointment and removal of trustees
• Mode of investment of trust funds
• Irrevocability clause (essential for tax exemptions)
• Amendment procedure
• Dissolution clause

Step 2: Print on Stamp Paper

The trust deed must be printed on non-judicial stamp paper. The stamp duty varies by state — typically ranging from ₹100 to ₹500 for a charitable trust deed.

Step 3: Sign the Trust Deed

All trustees and the settlor must sign the deed in the presence of two witnesses. The witnesses also sign the deed.

Step 4: Register with the Sub-Registrar

Submit the signed trust deed to the Sub-Registrar of Assurances in the jurisdiction where the trust's registered office is located. All trustees and the settlor must be present for registration (or authorise someone via Power of Attorney). A registration fee is payable (varies by state).

Step 5: Receive Registered Trust Deed

The Sub-Registrar registers the deed and returns the registered copy. This typically takes 5-10 working days.

Step 6: Apply for PAN and TAN

Apply for a PAN (Permanent Account Number) for the trust using Form 49A. If the trust will be making payments subject to TDS, also apply for a TAN.

12A and 80G Registration

For tax exemptions, a trust must obtain registrations under the Income Tax Act:

Section 12A Registration

Registration under Section 12A grants the trust income tax exemption. Without 12A registration, the trust's income is taxed at the maximum marginal rate. Application is filed in Form 10A online on the Income Tax portal.

Section 80G Registration

Registration under Section 80G allows donors to claim a tax deduction of 50% or 100% of their donation amount from their taxable income. This makes the trust more attractive to donors. Application is filed in Form 10G online.

Under the amended rules, 12A and 80G registrations are initially granted provisionally (for 5 years) and must be renewed before expiry.

Annual Compliance

• Income Tax Return: File ITR-7 by October 31 each year (mandatory for all registered trusts)
• Audit (Section 12A trusts): If total income exceeds ₹5 crore (or ₹2.5 crore where receipts include government grants), audit by a CA is mandatory
• Form 10B / 10BB: Audit report in prescribed form to be filed electronically
• FCRA Compliance: If receiving foreign contributions, maintain a designated FCRA bank account and file annual returns with MHA
• Books of Accounts: Maintain proper books of accounts including receipts and payments account, income and expenditure account, and balance sheet
• 85% Spending Rule: At least 85% of the trust's income must be spent on its objects during the year (or accumulated with approval)

How The Ledger Company Can Help

The Ledger Company provides comprehensive trust registration and compliance services. We draft customised trust deeds, handle Sub-Registrar formalities, obtain PAN/TAN, and secure 12A and 80G registrations for maximum tax benefits. Our team also manages ongoing compliance including ITR-7 filing, audit coordination, and FCRA compliance for trusts receiving foreign donations. Book a free consultation to set up your trust.