A charitable trust is created by a trust deed executed by the settlor in favour of trustees and registered with the local Sub-Registrar under the Registration Act, 1908. In states such as Maharashtra and Gujarat, public trusts are registered with the Charity Commissioner under state law. Tax exemption needs separate 12A and 80G registration.
What is a charitable trust?
A trust is an arrangement where a settlor transfers property to trustees to hold and use for specified beneficiaries or charitable purposes. Public charitable trusts are used for education, healthcare, relief of poverty and similar causes. Trusts are simpler to form and run than Section 8 companies.
Drafting the trust deed
- Name, address and objects of the trust
- Settlor details and initial corpus
- Trustees, their powers, appointment and removal
- Application of income and prohibition on private benefit
- Dissolution clause directing assets to similar charities
Registration process
- Draft the deed and print on stamp paper as per state stamp law.
- Book an appointment with the Sub-Registrar having jurisdiction.
- Settlor and witnesses appear with IDs; the deed is registered.
- In Maharashtra, Gujarat and similar states, apply to the Charity Commissioner under the state public trusts law.
- Apply for the trust's PAN and open a bank account.
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Get expert help →12A and 80G registration
Apply in Form 10A for provisional registration under Section 12A and approval under Section 80G. Provisional approval is typically valid for three years; then apply for regular registration in Form 10AB.
Frequently asked questions
How many trustees are required?
The law does not fix a universal minimum for public charitable trusts in most states, but at least two trustees is standard practice and often expected by registering authorities and banks.
Can a trust be registered online?
Some states allow online appointment booking and document submission, but trust deed registration generally requires the settlor and witnesses to appear before the Sub-Registrar for signature and biometric verification.
Is trust income tax-free?
Only if the trust is registered under Section 12A or 12AB and applies its income to charitable objects as required by the Income Tax Act. Without registration, trust income is taxable.
Can trustees be changed later?
Yes, as provided in the trust deed. Changes should be documented by resolution or supplementary deed and, where state law requires, reported to the Charity Commissioner.
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