A trust is a legal arrangement under which a person, known as the settlor or author, transfers property or funds to one or more trustees to be managed for specified beneficiaries or charitable purposes.

A trust may be established as a private trust for identified beneficiaries or as a public charitable or religious trust for the benefit of the public. The Indian Trusts Act, 1882 primarily deals with private trusts, while public charitable trusts may also be governed by applicable state laws.

A public charitable trust may be formed for purposes such as:

• Education and skill development
• Medical relief and healthcare
• Relief of poverty
• Women and child welfare
• Environmental protection
• Advancement of religion
• Rural development
• Promotion of art, culture and sports
• Animal welfare
• Other activities benefiting the general public

The objects must be clearly and specifically stated in the Trust Deed.

A trust generally requires:

• A settlor or author who creates the trust
• One or more trustees who manage the trust
• Identifiable beneficiaries or a clearly defined charitable purpose

There is no single uniform minimum number of trustees applicable to every public charitable trust across India. The appropriate number may depend on the applicable state law, registering authority and provisions of the Trust Deed.

For effective administration, a public charitable trust is commonly formed with more than one trustee.

A Trust Deed is the principal legal document governing the formation and operation of a trust.

It generally contains:

• Name and registered office of the trust
• Details of the settlor and trustees
• Charitable or religious objects
• Initial trust corpus or property
• Powers and duties of trustees
• Appointment and removal of trustees
• Meeting and decision-making procedures
• Operation of bank accounts
• Maintenance and audit of accounts
• Amendment and dissolution provisions
• Manner of utilisation of trust funds

The Trust Deed should be carefully drafted according to the trust’s proposed activities and future registration requirements.

The documents generally required include:

• PAN, identity proof and address proof of the settlor
• PAN, identity proof and address proof of trustees
• Passport-size photographs
• Proof of the proposed registered office
• Recent utility bill
• Rent or lease agreement, where applicable
• No-objection certificate from the property owner
• Draft Trust Deed
• Details of the charitable or religious objects
• Details of the initial corpus or trust property
• Photographs and identity proofs of witnesses
• State-specific application forms and declarations

Additional documents may be required where immovable property is settled in the trust or a state-specific public trust law applies.

The requirement depends on the nature of the trust, the property settled and the applicable state law.

A document creating or transferring an interest in immovable property may require compulsory registration under the Registration Act, 1908. In some jurisdictions, a Trust Deed not involving immovable property may be registered optionally with the Sub-Registrar. Certain states also have specific public trust laws requiring registration with the Charity Commissioner or another designated authority.

Registration is generally advisable because it provides documentary evidence of the trust’s formation and is commonly required for PAN, bank-account opening, tax registrations, grants and institutional funding.

There is generally no single nationwide minimum corpus prescribed for establishing every public charitable trust.

The settlor may contribute an appropriate initial amount or property as the trust corpus. The amount should be mentioned in the Trust Deed and transferred to the trust after registration.

Stamp duty, registration fees and practical corpus requirements may vary according to the state, nature of the deed and property settled in the trust.

The registration process generally involves:

• Selecting the proposed name of the trust.
• Finalising its charitable or religious objects.
• Selecting the settlor and trustees.
• Deciding the registered office and initial corpus.
• Preparing the Trust Deed.
• Paying the applicable stamp duty.
• Executing the deed in the presence of witnesses.
• Presenting the deed before the jurisdictional Sub-Registrar or designated authority.
• Completing identity verification and registration formalities.

10. Obtaining the registered Trust Deed or registration certificate.

Documents presented for registration are generally scrutinised, the applicable fees are paid and the executing parties or their authorised representatives appear before the Sub-Registrar.

No. Registration of the Trust Deed does not automatically provide income-tax exemption or allow donors to claim a deduction.

The trust must separately apply for the applicable charitable-institution registration and donor-deduction approval under the Income-tax law. Similarly, registrations such as NGO Darpan, CSR-1 and FCRA must be obtained separately, wherever applicable.

Depending on its activities and registrations, a trust may be required to:

• Obtain PAN and open a bank account
• Maintain proper books of account
• Keep minutes and records of trustee meetings
• Prepare annual financial statements
• Obtain an audit, where applicable
• File its income-tax return
• Renew its income-tax registrations within the prescribed time
• File donation statements and issue donor certificates, where applicable
• Report changes in trustees, objects, address or property
• Comply with state public trust requirements
• Obtain approval before accepting foreign contributions
• Use its income and assets only for its approved objects

State public trust laws may prescribe registration, accounting, audit and reporting requirements, while income-tax benefits require separate approval and continuing compliance.