Registration Process of Public Charitable Trust

The first step to register a trust starts with the drafting of a trust deed. The trust deed is to be executed on appropriate non-judicial stamp paper, the rate of stamp duty differs from State to State. The next step is to seek an appointment with the sub-registrar office having jurisdiction based on the registered office of the trust, and the Government registration fee is to be paid after that.

On the appointed date the trust deed is presented before the sub-registrar where all trustees need to be present along with two witnesses. The registration process is then undertaken by the office of the sub-registrar, and the registered deed can be collected after a week's time. The next logical step shall be to get the PAN and TAN Numbers allotted for the trust and open a Bank A/c for the trust.

Trust Compliances in India  

A Trust Shall Follow The Below Compliances

• Obtain PAN card
• Book Keeping and Accounts
• Annual IT filings
• Shops and Establishment License - in case of employment
• Professional Tax Registration
• GST registration
• Trusts are typically required to maintain proper books of accounts and records of their activities.
• Annual returns and audited financial statements may need to be filed with the appropriate regulatory authorities, such as the Income Tax Department or the Registrar of Trusts.
• Charitable trusts registered under Section 12A of the Income Tax Act must file annual returns in Form 10A.
• Trusts holding properties may need to file property tax returns and comply with local property tax laws. 
• Trusts engaged in specific activities, such as education, healthcare, or environmental conservation, may need to comply with sector-specific regulations and reporting requirements.
• Trusts receiving foreign contributions may need to register under the Foreign Contribution (Regulation) Act (FCRA) and comply with its reporting requirements.

  Applicability of Tax Exemption  under Income Tax Act

1. Section 11: Charitable trusts registered under Section 12A of the Income Tax Act can claim tax exemption under Section 11. This section provides exemption on income derived from property held under trust for charitable or religious purposes, to the extent that such income is applied for charitable or religious purposes in India.

2. Section 12A Registration: To avail tax exemption, a charitable trust must apply for registration under Section 12A of the Income Tax Act. The trust needs to file Form 10A with the Commissioner of Income Tax (Exemptions) to obtain this registration.

3. 80G Registration: Additionally, charitable trusts can apply for registration under Section 80G of the Income Tax Act to provide tax benefits to donors. Donations made to trusts with 80G registration are eligible for deduction from the donor's taxable income.

4. Annual Compliance: Charitable trusts are required to comply with certain annual reporting and disclosure requirements to maintain tax-exempt status. This includes filing annual returns and audited accounts with the Income Tax Department.

5. Tax on Business Income: Income earned by charitable trusts from business activities carried out for charitable purposes is also eligible for tax exemption under certain conditions. However, income derived from business activities that are not related to the charitable objectives may be subject to tax.

6. Conditions and Restrictions: The Income Tax Act imposes certain conditions and restrictions on the activities of charitable trusts to qualify for tax exemption. For example, trusts must ensure that their income is used solely for charitable purposes and not for the benefit of any specific individuals or entities.

7. Amendments and Updates: It's important for charitable trusts to stay updated on any amendments or changes to the Income Tax Act that may affect their tax-exempt status or reporting requirements

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