Exemptions & procedure for registration of trust - tradecareer

    Exemptions & procedure for registration of trust

 Exemptions available to Charitable and Public Trust:

Section 10 of the Income Tax Act, 1961

Total tax exemption is available for certain types of Trusts, if both the following conditions are satisfied -

=> The activities of Trust shall be related to sports, education, scientific professions, or promotion of khadi and village based industries, hospitals etc. and

=> They shall be notified as charitable or religious institutions.Section 11 of the Income Tax Act, 1961

If the trust is for any religious or charitable purpose then, any income, profits or gains earned by such trust from a property held by the trust shall not be included in the total income of the trust.

Section 12 of the Income Tax Act, 1961

=> Income received by way of voluntary contributions towards the corpus of the trust shall not be taxable.

=> If Charitable trusts are created for the benefit of any of the socially and economically backward castes such as Scheduled Castes, Scheduled Tribes or women or children, then its Income shall be exempt from Tax.

                                                                           


Procedure for Registration of Trust

1) Creation of a Trust Deed

A trust deed may be created using any language sufficient to show the intention. It has following contents:

=> Name of the author/settlor of the trust;

=> Name of the trustee;

=> Name if any, of the beneficiary or whether it shall be the public at large;

=> Name by which the trust shall be known;

=> Place of principal and other offices of trust;

=> The property that shall devolve;

=> An intention to divest the trust property upon the trustee;

=> Object and purpose of the trust;

=> Procedure for appointment, removal or replacement of a trustee, their rights, duties and powers, etc.

=> Rights and duties of the beneficiary.

=> Mode and method of determination (dissolution) of the trust.

2) Signing of deed

The deed must be signed by Settlor(author) and Trustees in presence of at-least 2 witnesses.

3) Printing the deed on stamp paper

Print the Trust deed on appropriate value stamp paper.

4) Registration of the deed

Registering the deed with the Sub-Registrar at the time of registration, the settlor and witnesses must be personally present with their identity proof in original

5) Application for PAN & Bank Account

After registration Trust should apply for PAN and opening a bank account.

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