How to Register a Public Charitable Trust in India?

Do you want to set up a public charitable trust in India? If so, you are in the right place! In this blog post, we will walk you through the process of registering your trust. It is important to follow all the steps carefully in order to ensure that your trust is legally recognized. Let’s get started!

What is a public charitable trust in India?

A public charitable trust in India is a legal entity created for the purpose of charitable activities. The main purpose of setting up a public charitable trust is to provide social benefits to the general public as well as serve some specific objectives such as promoting education, providing medical aid, and protecting the environment.

What are its benefits?

The benefits of a public charitable trust are numerous.

1. It provides an opportunity for philanthropists to utilize their resources for a noble cause. 
2. It offers tax advantages as contributions made to public charitable trusts are exempt from taxation under many sections of the Indian Income Tax Act. 
3. It allows donations to be made in the form of land or other movable or immovable property. 
4. Public charitable trusts are regulated by a governing body which is responsible for ensuring that resources are utilized according to the objectives defined in the trust deed.

Overall, setting up a public charitable trust can help individuals and organizations make a lasting contribution to society while also enjoying the tax benefits associated with it.

How to set up a public charitable trust in India?

Setting up a public charitable trust in India is not as complicated as it may seem. There are certain steps that need to be followed in order to set up the trust and ensure that it is compliant with Indian law.

Step 1: Drafting the Trust Deed: The first step towards setting up a public charitable trust is drafting the Trust Deed. This is a legal document that outlines the purpose and goals of the trust, how it will be administered and managed, how funds are to be raised and distributed, who are the trustees and beneficiaries of the trust, etc. It needs to be registered with the Registrar of Charitable Trusts in India in order for it to be legally valid.

Step 2: Applying for Registration: This is done by filing Form-10 at the appropriate office and submitting important documents such as PAN card, identity proof, address proof and so on. The registration fee also needs to be paid along with the application.

Step 3: Opening a Bank Account: Once the trust is registered, it needs to open a bank account in order to manage all financial activities of the trust. This can be done at any public or private sector bank in India.

Step 4: Taxation and Compliance with Indian Laws: The trust also needs to comply with all applicable laws and regulations prescribed by the Government of India. It needs to acquire relevant registrations such as PAN, TAN and 12A so that it can file its tax returns periodically. The trust also needs to register itself with the Income Tax Department in order to avail certain benefits and exemptions under income tax law.

Step 5: Finalizing the Trust operations: Once all the necessary steps are followed and complied with, the trust can finally begin its operations. It needs to have a proper management structure in place for efficient functioning of the trust. The activities of the trust should be monitored regularly to ensure that it complies with all applicable laws, regulations and procedures. The trust also needs to have proper bookkeeping and accounting systems in place for accurate tracking of its financial activities.

Finally, the trust should regularly review its objectives and activities to ensure that it is still working towards achieving its goals. It should also strive to be transparent and accountable in all of its activities so as to maintain public trust. With all these steps in place, the trust can be sure of having a successful and productive run.

Documents required for registration of a public charitable trust in India

The registration of a public charitable trust in India requires the submission of certain documents to the relevant authorities. The documents required for the registration of a public charitable trust in India are mentioned below:

1. Application Form 10A: This form is used by applicants who seek to register an existing trust as a public charitable trust. The application must include details such as the name and address of the trust, its objects, the names and addresses of trustees, etc.

2. Trust Deed: This document sets out the rules and regulations that govern the functioning of a public charitable trust. The deed must be signed by all trustees and should include details like the objects of the trust and rights and duties of trustees.

3. Income Tax Exemption Certificate: This document is issued by the Income Tax Department to certify that the trust and its activities are eligible for income tax exemption under Section 12A and 80G of the Income Tax Act, 1961.

4. Copy of PAN Card: A copy of the Permanent Account Number (PAN) card of the trust is required for registration.

5. Affidavit: An affidavit must be submitted stating that all the documents and information provided are true and correct to the best of the knowledge of the applicant.

6. Bank Statement: A copy of the bank statement where donations made to the trust will be deposited is also required.

7. Copies of Identification Documents: Copies of the identification documents such as Voter ID, Aadhaar Card or Passport of all trustees are to be provided.

8. NOC from Landlord (if applicable): A No Objection Certificate (NOC) from the landlord is required if the trust is being registered in rented premises.

The registration process may vary slightly from state to state, so it is best to get further information on the requirements for registration in your particular state. The registering authority will then issue a Certificate of Registration that must be kept in safe custody.

Once the trust is registered, it can start accepting donations and apply for tax exemptions according to the applicable laws.

How to maintain a public charitable trust in India?

It is important to maintain a public charitable trust in India in order to ensure that its funds are used for the intended purpose and to ensure compliance with all applicable laws and regulations.

The following steps can be taken to successfully maintain a public charitable trust in India:

1. Prepare a comprehensive trust deed: A trust deed should be prepared in consultation with a legal expert to ensure that all the provisions of the trust are legally valid and comply with applicable laws.

2. Appoint Trustees: The trust deed should clearly define who will be appointed as trustees and their respective roles and responsibilities, including rights of access to accounts and information about the trust.

3. Ensure proper fund management: It is important to ensure proper fund management so that funds are used for the intended purpose. This involves keeping accurate records of all accounts and investments, obtaining professional advice when needed and ensuring that all financial transactions comply with applicable laws.

4. Monitor activities regularly: The trustees should monitor activities regularly to ensure that the trust is functioning as intended. This includes keeping track of any changes in the trust deed, making sure donations are used for the intended purpose and ensuring that all laws and regulations are being followed.

5. File an annual return: Every public charitable trust is required to file an annual return with the Registrar of Charitable Trusts (ROC). The return should include details such as the trust deed, names of trustees and donations received during the year.

By following these steps, it is possible to maintain a public charitable trust in India and ensure that its funds are used for their intended purpose. It is also important to seek legal advice to ensure compliance with applicable laws and regulations.