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NGO and Trust Registration

NGO and Trust Registation

Trusts play a significant role in India’s social and economic landscape, contributing to various charitable, educational, and developmental endeavors. In recognition of their contributions, the Indian government offers a range of incentives and benefits to registered trusts.

One of the primary advantages of trust registration is access to a host of tax exemptions provided by the Income-tax department. Unlike NGOs, which are typically focused on non-profit activities, trusts may engage in revenue-generating activities, but their primary objective is not profit maximization. As a result, they qualify for various tax relaxations that can significantly reduce their financial burden.

Advantages of Trust Registration

  • Access to Government Land: Registered trusts may be eligible to receive land grants from the government for the purpose of carrying out their charitable or developmental activities.
  • Use of Government-Registered Name: Registered trusts gain the right to use their government-registered name, which provides a sense of legitimacy and authority.
  • Tax Benefits: Registered trusts are entitled to a range of tax exemptions, including income tax exemption on their profits, exemption from service tax, and eligibility for tax deductions for donations received.
  • 80G Certificate Benefits: Obtaining an 80G certificate allows donors to claim tax deductions for contributions made to the trust.
  • White Money for Building Construction: Registered trusts can utilize white money, which is legally declared income, for construction purposes.
  • Service Tax and Income Tax Benefits: Registered trusts may be exempt from service tax and enjoy reduced income tax rates.

Documents Required for Trust Registration

  • The process of registering a trust involves submitting a set of documents to the designated authority, typically the Registrar of Trusts or the Charity Commissioner in the respective state. The required documents typically include:
  • Trust Deed: A detailed legal document outlining the trust’s objectives, structure, management, and distribution of assets.
  • Application for Registration: A duly filled form requesting registration of the trust, accompanied by the prescribed fees.
  • Address Proof: Proof of the trust’s registered office address, such as a copy of the lease agreement or utility bill.
  • Identity Proof of Trustees: Identity documents, such as PAN cards or Aadhaar cards, for all trustees.
  • Photographs of Trustees: Passport-size photographs of all trustees.
  • Declaration of Trust: A declaration confirming the trust’s existence, objectives, and trustees.
  • Trust Corpus Details: Details of the trust’s assets, including their value and sources.
  • Details of Beneficiaries: A list of the trust’s beneficiaries and their relationship to the trust.
  • Consent Letters from Trustees: Consent letters from all trustees agreeing to accept the trusteeship.
  • No Objection Certificate (NOC) for Premises: If the trust’s registered office is located on rented premises, an NOC from the landlord is required.