In India, a trust is one of the most common legal structures used for charitable, educational, religious, and social welfare purposes. Trusts help individuals and organizations pool resources and serve communities through structured and tax-exempt mechanisms. If you’re planning to establish one, understanding the process of trust registration is crucial.
This article walks you through the process, documentation, and legal aspects of trust registration in India.
What Is a Trust?
A trust is a legal arrangement wherein the owner (called the “settlor” or “author of the trust”) transfers property or assets to trustees for the benefit of a third party (the “beneficiaries”). Trusts can be classified as private or public. Public charitable trusts are the most common form used for social welfare and are eligible for tax exemptions under sections 12A and 80G of the Income Tax Act.
To legally operate such a body, trust registration is mandatory.
Why Is Trust Registration Important?
Trust registration provides a legal identity to the trust, allowing it to open a bank account, buy property, receive funds, and apply for government grants or CSR funding. Registered trusts also become eligible for tax exemptions and donor tax benefits. Without trust registration, your organization might face credibility issues and may not be recognized by authorities or donors.
Step-by-Step Process for Trust Registration
1. Decide the Name of the Trust
Choose a unique name for your trust. It should not violate any provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950. The name should be appropriate and not resemble any existing registered trust.
2. Draft the Trust Deed
The trust deed is the foundational document for trust registration. It must include:
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Name and address of the trust
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Objectives of the trust
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Details of the settlor, trustees, and beneficiaries
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Power and duties of trustees
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Procedures for appointments and meetings
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Rules related to management and dissolution
This document needs to be printed on non-judicial stamp paper, the value of which varies by state.
3. Selection of Trustees
At least two trustees are required for trust registration. Trustees should not be minors, bankrupt, or of unsound mind. Their roles, responsibilities, and powers should be clearly defined in the trust deed.
4. Notarization and Submission
After drafting, the trust deed must be signed by the settlor and trustees in the presence of two witnesses. It then has to be submitted at the office of the local sub-registrar for official trust registration.
You will need to carry:
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Two passport-size photographs of settlor and trustees
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Identity proof (Aadhar, PAN, passport, etc.)
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Address proof (utility bills, rent agreement)
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PAN card of the trust (can be applied after registration)
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Proof of registered office (ownership document or rent agreement with NOC)
5. Registration at the Sub-Registrar’s Office
Visit the sub-registrar office where the trust deed is submitted. All parties (settlor and trustees) must be physically present with original documents for verification. Once verified, the trust deed is registered, and a copy is returned with a registration number and seal.
This completes the official trust registration.
Post-Registration Requirements
Once trust registration is complete, several steps follow:
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Apply for a PAN card in the name of the trust
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Open a bank account in the trust’s name
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Register under 12A and 80G for income tax exemption
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Apply for FCRA (if receiving foreign donations)
Benefits of Trust Registration
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Legal recognition
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Access to government schemes and CSR funding
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Tax exemption under 12A and 80G
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Enhances credibility among donors
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Smooth management of assets and resources
Trust registration not only provides a legal framework but also ensures transparency and accountability in operations.
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Frequently Asked Questions
Q1. Is it compulsory to register a trust in India?
Yes, for public charitable purposes, trust registration is necessary to obtain tax exemptions and receive grants or donations.
Q2. Can a single person form a trust?
No, you need at least two trustees for trust registration. A settlor and one trustee is the bare minimum, but three or more is advisable for smooth governance.
Q3. How long does the trust registration process take?
Typically, trust registration takes around 10–15 working days, depending on the sub-registrar office and completeness of documentation.
Q4. Is online trust registration available?
While certain documentation steps can be completed online, final registration must be done physically at the sub-registrar office.
Q5. What are the fees involved in trust registration?
The cost includes the value of the stamp paper (varies by state), notary charges, and professional fees if you hire a consultant or lawyer. Typically, it ranges from ₹5,000 to ₹15,000.
Conclusion
Trust registration in India is a relatively straightforward but legally significant process. It involves careful documentation, legal vetting, and formal procedures at the sub-registrar’s office. Whether you aim to start a school, a charity, a community development project, or a health initiative, trust registration lays the foundation for operational legitimacy and long-term success.
By following the correct steps and fulfilling legal requirements, your organization can not only begin serving society effectively but also gain access to benefits like tax exemptions and CSR contributions. If you’re planning to start a charitable venture, begin your journey with proper trust registration and give your cause the legal backing it deserves.
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