What is Trust Registration in India?
What is a Trust?
A Trust refers to an arrangement in which a property is handed over to or vested in a person to be used and disposed off for the benefit of another person. But that is just a legal definition of Trust in India. Let us not understand what Trust is within an Indian context.
What is Trust Registration?
A Welfare Trust Registration, or simply, a Trust Registration, is an entity that exists and is governed with registration under the Indian Trust Act, 1882. mistakenly known as the Trust Registration Act, 1882). A registered trust is referred to as a legal arrangement within two parties. One party is the beneficiary, and the other is the benefactor. The benefactor holds the power to transfer his assets to the beneficiary as per the contract of a registered trust in India.
Within the legal context of trust deed registration, the benefactor is known as the Trustor, and the beneficiary is known as the Trustee. But why does one opt for establishing a Trust? Is it only to earn the benefits that come with Trust Registration under the Income Tax Act? The answer is both yes and no.
Benefits of Trust Registration in India
Establishment of Charitable Undertakings
Starting a charitable trust in Delhi by getting the registration of charitable Trust in India will have to start various charitable endeavours. You can specify in the bylaws the reasons behind the registration of a trust in India, and you will be able to help a lot of people.
Children Aid
If you want a secure future for your children, private trust registration in India is something you can work towards. Unlike a public charitable trust registration, it will allow you to become a trustor and carefully manage your assets so your Trustee – your children – can have a secure financial future.
Tax Exemptions
Getting Online trust registration, whether it is a public trust registration or a new trust registration online that is private, leads to several tax exemptions. A Trust, in most cases, is considered akin to an NGO. Therefore, public trusts in India can enjoy tax exemptions by registering as Charitable Trusts under the Income Tax Act with registration under section 12A of the Income Tax Act and registration under section 12AA. Furthermore, under special provisions, setting up a trust online and getting Section 12AB registration is also beneficial as far as taxation is concerned.
Helping Aggrieved Individuals
A Trust registered under Section 12A helps with Trust Online Registration but also helps the consolidation of a society whose sole purpose is to help the most people.
Easy Incorporation
The trust registration process in Delhi doesn't have any hindrances. The procedure is easy to follow and easier to implement. One merely needs to fill out the trust registration form via the appropriate trust registration format, Go to the Trust registration office in Delhi, and get the registration certificate on time.
Familial Wealth Coverage
Registration of a private Trust is considered of utmost importance for those who wish to protect their personal assets in India.
Establishing Temples
If you are a devout individual, registration of religious Trust is something you can get into. You can tap into the Temple Trust Registration procedure and establish a society that can consolidate a temple in the future.
Types of Trust Registration in India
Trust Registrations are comprised of two of the following categories:
Public Trust Formation
Public Trust is referred to as the Non-Profit Charitable Organization or a Non-Governmental Organization. The objectives of a public trust are as follows:
- To set up a school or educational institute to provide education to the children
- To set up a hospital or nursing home the providing medical facilities to the poor
- To take care of the old aged, senior citizens, widows, children and the disabled.
- To promote child and women's health and women's empowerment.
- To provide social welfare to the society
- To provide spiritual and other forms of cultural activities
- To provide training for the people belonging to backward or poor classes.
- To set up temples and other religious activities.
- To set up associations to protect the environment.
- To provide the poor with food, shelter, drinking water and other basic amenities
- Ultimately, Public Registration of Trust in India aims to provide charitable services.
Private Trust Formation
In this type of Trust, the beneficiaries are individuals or families. The objects of this type of Trust are as follows:
- To provide benefits and welfare to a particular member of the family
- To manage and preserve a particular property
Public-cum-Private Trust
A Public-cum-Private Trust is an entity that serves two purposes. The income they generate can be used for public or for private reasons. A trust registered of this type is considered the most versatile in India.
Trust Deed
The registration of a Trust involves the Trust Deed Registration. A Trust Deed is a document in which the Trust's aims, objects and management modes are defined.
If you are looking for Trust registration in Delhi or trust deed registration in Delhi, then you should get in touch with Registrationwala. We can provide you with all the assistance pertaining to the registration of this entity. Our professionals will ensure that your Trust gets registered at the proper time.
However, just incorporating the Trust is not enough. Once you obtain the trust deed registration certificate, You have to take care of the compliances. If you don't, you will face a lot of penalties that you cannot escape from:
Penalties for running an unregistered Trust in India
Civil and Criminal Penalties
Not following the rules mentioned in the trust deed is considered a contravention of the provisions of the Trust Registration Act. And thus, you will become liable for civil and criminal penalties.
Default in acquiring Tax Deduction Account Number
A Trust must obtain the Tax Deduction Account Number. Not doing so is considered a criminal offence per Section 27BB of the Indian Trust Act, 1882.
Default in filing Income Tax Returns
Not every Trust is considered to be a Non-Profit Organization. Unless the Trust has the registration under Section 12A of the income tax act, it cannot avail of tax benefits. It means that the Trust is required to furnish the tax returns on time. Not complying with the rules will cause issues for your company.