Registration of a Trust

A trust is a convenient method whereby a limited number of persons may hold property on behalf other persons, who maybe a large or fluctuating body or who may include persons not yet born. Once the property has vested in the trustees, they own the property, but they has compelled by law to exercise their ownership for the benefit of the beneficiaries and for them only. It means that legal ownership vests in the trustee or trustees but beneficiaries have  ownership.

A trust is 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

• Author of Trust – the person who reposes or declares the confidence is calling the “Author of the trust”

• Trustee – The person who accepts the confidence is calling the “Trustee”

• Beneficiaries – The person for whose benefit the confidence is accepting called the “Beneficiaries”

• Trust Property – The subject matter of trust has called “Trust Property” or “Trust money”

• Instrument of Trust – The instrument, if any, by which the trust is declaring called the “Instrument of Trust”

The following definition has taken primarily from the Law Dictionary for Non-Lawyers by Daniel Oran. They are mean to help anyone unfamiliar with the terminology to understand the Registration of Trust form. Court personnel cannot give legal advice, so if you have questions about how to create or manage a trust, you should contact a lawyer.

Registration of a Trust has required from two angles;

1. Registration under State Act.

2. Registration under Income Tax Act.

No formal deed or any other writing is necessary to constitute a charitable trust. It is legally not necessary to have a written trust deed for the charitable trust / religious trusts societies and institutions. From the practical point of vies, however, it is always advisable for charitable trusts to have a proper registered trust deed. When the trust deed has reduced into writing with the registrar, it facilitates exemptions under section 80g of the Income- Tax Act for the donors. It may Noted that this is an essential need for the purposes of section 80g of the Income-tax Act, 1961.

Under the provisions of sections 11, 12, 12a and 13 read with sections 60 to 63 of the Income Tax Act, the income of charitable / religious trust has exempted from income tax subject to the fulfillment certain conditions. Such trust / institutions has entitled to exemption under the Income tax Act when they have created or established for charitable purposes as defined under Ngo Registration in Delhi of the Income tax Act, 1961.