Trust Registration
The trust is a harmonization where the owner of the Trust transfers the property to a trustee
Online Trust Registration in India Starting at just Rs. 999/-
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 time. The next logical step shall be to get the PAN and TAN Number allotted for the trust and open a Bank A/c for the trust.
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To Involve In Charitable Activities
Charitable trusts are set up with the common objective of getting involved in charitable activities while collecting certain benefits for him, his heirs, and successors.
Registered Trust Avails Tax Exemptions
The other main reason for setting up the registered Trust is to avail tax exemptions. Such charitable trusts are nonprofit organizations and to avail all these perquisites, the charitable trust should have a legal entity.
Provides Benefits To Poor People
The registered trust provides the advantage to the poor people and the public by exercising the charitable activities fairly.
Compliance With Law
By registering the trust, compliance would be maintained under the provisions of the Indian Trusts Act, 1882, which will directly keep the Trust safe from any legal hindrance.
Preservation Of Family Wealth
Trusts may be utilized to own specific assets, such as land/an interest in a family based company, which would not be suitable or practical for a settlor to split between individuals. The usage of a trust allows such individuals to benefit from the assets despite the fact that they do not own them. A trust will also assist to preserve the capital value of such assets for potential generations.
Forced Heirship
The Residents of countries with fixed laws of legacy may be able to utilize trusts to get the flexibility they offer in respect of distribution of part/all of their assets to beneficiaries who could otherwise not be permitted to benefit under the laws of their country of the residence. Such planning must be made under a detailed professional guidance from legal experts in their nation of residence/nationality.
Tax Mitigation
Trusts can be very effective in reducing taxation on capital and income. The trust may provide effective protection for the settlor, the beneficiaries and the trust assets from punitive taxation. A frequent use for trusts is the mitigation or avoidance of inheritance tax in the settlor’s jurisdiction although this will, naturally, be subject to appropriate tax advice being obtained.
Managing Assets
Trusts can be very effective in reducing taxation on capital and income. The trust may provide effective protection for the settlor, the beneficiaries and the trust assets from punitive taxation.
Documents Required for Trust Registration
- Proof of Identity for Trustor & Trustee-Aadhaar Card, Voter ID, Passport, Driving License
- Address Proof of Registered Office- Copy of Certificate of Property/Utility Bills (Telephone, Water, Electricity Bill)
- In the case of rented property, NOC from the Landlord is required.
- Objective of the Trust Deed.
- Particulars of the Trustee and settlor (Self-attested copy Id and Address Proof along with the information related to occupation).
- Trust Deed on Proper Stamp Value.
- Photographs of Trustee and settlor.
- PAN Card of Trustee and settlor.
Step-1:Selection of Name
First thing is to select a unique name of your trust, the name should not violate or infringes someone else name or trademark.
Step-2:Drafting Of Deed
The trust deed needs to be drafted wherein the parties to the deed shall be settlor (author of the trust deed), the trustee and the beneficiary.
Step-3:Trust Registration
A trust deed is a document which requires mandatory registration before the registrar of the trusts having jurisdiction.
Step-4:PAN, TAN And Bank A/C
After registration of the trust, the next step is to apply for allotment of PAN Number and TAN and thereafter opening of a bank A/c.
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1. Is it mandatory for the trust to get the registration done under section 12AB?
Yes, a trust must get the registered under section 12AB of Income Tax Act, 1961 to claim an exemption under section 11. -
2. Is trust a separate Legal Entity?
In a strict legal sense, a trust is not a separate legal entity, unlike a company. A trust gets created when the settlor hands over any property to the trustee to be used and employed for the benefit of the beneficiary. This legal arrangement is codified vide a trust deed. -
3. What are the Parties of a Trust?
Settlor
Trustee, and
Beneficiaries
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4. What are the different types of Trust?
Private Trust
Public Trust -
5. What is the Difference between Trustee and Trustor?
Trustor is the person who creates the trust, whereas the person who has the responsibility of managing the trust for the beneficiary is known as Trustee. -
6. What is the governing law for a Trust?
The Indian Trusts Act, 1882, is a governing law for a Trust in India. -
7. What is a Public Trust and what is the purpose behind forming it?
By and large an public trust is made for setting up a school, universities, other instructive activities, clinic, mature age homes, halfway house, for advancement of kid wellbeing and their strengthening, government assistance of more fragile segment of society, and for satisfaction of Corporate Social Responsibilities (CSR) by organizations. -
8. What about Amendment in Private trust Deed?
It is extremely difficult to amend a trust deed since a trust by its inherent nature is irrevocable. Therefore, it is important to provide the amendment clauses in the trust deed itself. However, if the amendment clauses provided in the trust deed are too wide, then the trust may not be treated as irrevocable.
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