Trust registration procedure in India depends upon the type of trust. There are two types of trust:
- Public trust
- Private trust
Both are governed by separate laws. Registration of Private Trusts takes place under the Indian Trusts Act, 1882. But, there is no separate act for public trusts and they are governed by their respective state laws. These state laws usually appoint a commissioner who administers and carries all trust activities in that state. One example of such state laws is Rajasthan Public Trusts Act, 1959. It appoints a Devasthan Commissioner for administering trust activities in Rajasthan.
A trust is a form of interest created in a property. This interest is created by one person for the benefit of another person. The interest in the property relates to its ownership. For instance, a father wants his daughter to enjoy the benefits of his property. Now he can either become a trustee himself and can also appoint his friend as one. Now the trustee will manage the property and look after it. The daughter will be the beneficiary. She will receive all benefits arising from the property.
PocketLawyer is India's leading platform for Business Registration, Tax Registration and NGO Registration services. We make the process of Trust Registration easy and hassle-free for you. In addition to Trust Registration, PocketLawyer can also help you with Society Registration, 80G Registration, Section 8 Company Registration and more.
Difference between a Public Trust and Private Trust
- Public trust is formed to benefit the public at large. Private trust is created for the benefit of one or more specific persons.
- Creating a public trust does not call for a formal deed or any other document in respect of immovable property. However, private trusts do require the same.
- Public trusts accept donations from general public, but private trusts do not.
- Private trusts do not receive the tax benefits that public trusts receive.
Validity of a Trust
Before proceeding to trust registration, you should know whether your trust is a valid trust. The state public trust laws do not state any essential ingredients of a valid trust. However, the Indian Trusts Act, 1882 which governs private trust states that a valid trust must:
- Have a lawful purpose.
- Be for a beneficiary.
- Contain a property as its subject-matter.
- Such property must be transferable to the beneficiary.
- Be the creation of a person who is competent to contract.
- Have a written and signed document for immovable property.
- Appoint at least two trustees.
- Have one settler.
- Be for an object (religious or charitable).
- Have two witnesses.
Documents Required for Trust Registration
You need the following documents:
- Trust deed on a stamp paper. The value of stamp paper varies from one state to another.
- Passport size photographs of the settler, the witnesses, and the trustees.
- ID proofs of the settler, the witnesses, and the trustees.
- Proof of registered office. A document such as electricity bill, water bill, or house tax receipt.
Fees for Trust Registration
Trust registration fee depends upon the value of the property which is the subject-matter of trust. It is 1 % percent of the value of the property. Please note that you need to pay stamp duty as well as the registration fee for registration of your trust.
Timeline for Trust Registration
Trust registration takes anywhere between 60-100 days.
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