A trust can be understood to be an arrangement wherein a property is handed over to or vested in a person so as to be used and later on disposed of for the benefit of another person referred to as the beneficiary.
As per the Indian law, trusts are registered under the Trust Act, 1882. The Trust Act, 1882 defines trust as “an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner. Simply, it is a transfer of property by the owner to another person for the benefit of the third person.
the objectives of charitable trusts are as follows:-
The objectives of such type of trusts are as follows:-
The trust deed should be executed on the stamp paper of the value to be determined as per the valuation of the trust property. The application for the registration should be made to the concerned sub-registrar on the basis of the jurisdiction of the region where the trust is desired to be registered.
It is mandatory to get the trust deed registered in case of a charitable or religious trust, for claiming an exemption under section 11 of the Income Tax Act in relation to immovable property. Essential contents of a trust deed are as follows:-
Charitable and religious trusts which claim exemption u/s 11 and 12, Income Tax Act, have to mandatorily obtain 12A registration. Since the private and family trusts are not given any such exemptions and hence cannot obtain 12A registration. The process has been made online for applying for 12A registration and Form 10A filling using the digital signature of the signatory. So in order to obtain 12A registration, you have to make an online application to the Income Tax Commissioner in Form 10A for registration of Charitable or religious trust or institution. Documents to be furnished for registration are as follows:-