Trust Registration

Trust Registration

Why is Trust registration required?

A trust is registered under Indian Trust Act, 1882. A trust can give education to number of students. When the purpose of the trust is to benefit the public, it is public trust. Wealth has no meaning unless it is used for a noble cause. The trust can be formed even through a will. Trust is a relief of poverty or distress. It gives medical relief for many peoples. The facilities are provided in the interest of public welfare and social benefit. There is no definite form for the formation of the trust and only the objectives should be mentioned clear cut and categorical.

Benefits of Trust Registration

  • Charitable trusts are usually set up with the common objective of getting involved in charitable activities while collecting certain benefits for him, his heirs, and successors
  • 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.
  • The registered trust provides the advantage to the poor people and the public by exercising the charitable activities fairly.
  • 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.
  • 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.
  • When a person and her/his family shift to another country, it is frequently an ideal/only time to set up a trust in order to evade taxation in the destination nation, thereby protecting the family wealth & providing flexibility in its organization. Such organization requires detailed professional advice and guidance.
  • 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

CATEGORIES OF TRUST

  1. Public Trust
  • Public trusts are the one who works for the benefits of public in large number and can be divided in two public trusts: Public Charitable Trust and Public Religious Trust.
  1. Private Trust
  • A Private trust is who works for families or individuals.

REGISTRATION REQUIREMENT OF TRUST

  1. A trust has 3 parties involved as per the Indian Trust Act, 1882, a trustor, a trustee and a beneficiary where a trustor is the one who owns the trust and transfers the property to someone else and that someone else is the trustee which benefits the third person who is known as beneficiary. A proclamation is decreed along with the transfer that the property should be kept for the beneficiaries of the Trust.

Procedure for trust registration

  • A unique name is selected of the trust and the name should not violate or infringes someone else name or trademark.
  • 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.
  • A trust deed is a document which requires mandatory registration before the registrar of the trusts having jurisdiction
  • 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.

Documents Required

  1. Trust Deed
  2. Copy of Aadhaar card, passport, voter ID, driving license or any such photo ID. (of settler)
  3. Copy of Aadhaar card, passport, voter ID, driving license or any such photo ID (of each trustee)
  4. PAN card
  5. Proof of the registered office address of the Trust (electricity/water bill or registration certificate)
  6. No Objection letter signed by the landowner

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