Register A Charitable Trust or A Religious Trust Under Income Tax Act
Income Tax

How to Register A Charitable Trust or A Religious Trust Under Income Tax Act

A Charitable or religious trust can be registered with the registration authority as per section 8 of the companies act.

Then what does the income tax act has to do with the process?

Before trying to find an answer to the tricky query, here is a good piece of advice. Whether you are going to register a new organization or manage certain certifications for an existing trust, it is always advantageous to approach people who know how to fulfill your requirement. Taxrobo is a great company that has ample expertise in handling the affairs with regards to registration as well as managing the affairs of charitable and religious trusts. 

There Are Two Types of Registrations for a Trust

1. In compliance with the state act for registration.

2. In compliance with the income tax act for registration.

Other Rules Under Which A Charitable And Religious Trust Can be Registered

i) Indian Registration Act.

ii) Public Trusts Act.

iii) Income Tax Act.

iv) Foreign Contribution (Regulation) Act

A trust registered under any of these acts is eligible to apply for tax related exemptions at a later stage. Consulting a charitable and religious trusts practitioner is the best way to get your trust registered for such exemptions from the income tax department.

Income Tax and Charitable Trusts

Religious and charitable trusts work for the welfare and uplifting of the weaker sections of the society. They are not doing it for personal benefits. They need capital to carry out their activities for the betterment of the society as a whole. The money required for the successful running of a trust is obtained from donations. Such donations are not considered as an income and so they are exempt from tax.

Sections of Income Tax Act For Trusts

Religious and charitable trusts that are created in parlance with the definitions contained under section 2(15) of the income tax act 1961.

i) Sections 11, 12, 12A and 13 of the income tax act are used to declare the income of a charitable or religious trust as tax free.

ii) Sections 60 to 63 are incorporated into the laws of such trusts to comply with the income tax act.

iii) Persons or organizations that donate to such trusts also get exemptions on the amounts donated as per section 80G of the income tax act. 

Application for such exemptions and subsequent orders can be a tedious job for people engaged in other activities. If you can find an experienced company that is reputed in registering trusts is a great choice to get your work done.

Step by Step Procedure for Registration

1. Number of Founding Members

The minimum number of people required to form a trust are three.

2. Documents to be Submitted with the Registering Authority.

i) Request letter.

ii) List of founding members and the proposed governing body signed by all members. Memorandum and articles of association.

iii) Rules and regulations of the Trust.

iv) Affidavits signed by the managing trustee.

v) Government issued photo identity proof of all members.

vi) Proof of residence of all members.

Final Decision by Income Tax Authorities

Registration of Charitable and Religious trust under income tax Act requires scrutiny by an income tax official not below the rank of commissioner.

If all the stipulations of the income tax act have been met, an order will be issued to that effect.

Get an Expert to Get Your Trust Registered

All religious and charitable trusts that have successfully completed their registration and obtained the relevant certificates from the income tax department have taken the services of a company specialized in the matters of trusts. You can view the details of a great company recommended by satisfied clients here. 

Drafted By:
CS.A.Maniraj.,B.Com.,ACS.,CA(Fin), Independent Director 
Certified CSR Professional., Certified GST Professional.

Register A Charitable Trust or A Religious Trust Under Income Tax Act
Maniraj Anantham 1 March, 2024
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