Re-registration of charitable Trusts is mandatory according to new Income Tax Rules. Read to know more about the process of Renewal registration of trust in India.
Charitable trusts in India were created to help those in need. There are many new charitable trusts in India that are registered under the Indian Trusts Act, of 1882. The main objective of charitable trusts is to help people with a variety of needs, such as providing education, healthcare, financial assistance, and environmental programs.
Registration of a charitable trust is a process of legally authorizing an institute/trust for the proper authority of the territory. The legalization of the charitable trust is very beneficial and allows tax exemption.
This article will provide a brief overview of charitable trusts in India that are registered under the Indian Trusts Act, of 1882, and will help you understand the benefits of registering a trust in India.
Charitable Trusts in India
All trusts registered in India are eligible for several tax deductions provided by the Income Tax Department. Since the purpose of the trust does not translate into the generation of profits, like NGOs, they can benefit from various tax exemptions. However, such benefits are only available to registered deed trustees.
Charities and religious trusts operate under the Religious Endowments Act of 1863 and the Charitable and Religious Trusts Act of 1920. Apart from this, the Bombay Public Trust Act of 1950 governs the registered charitable trusts in India.
The Income Tax Department offers several tax exemptions to all registered trusts in India. The working of NGOs is not based on earning profits and hence, they are also eligible for tax exemptions like Charitable Trusts in the nation. However, it must be kept in mind that all these benefits are available only for Trusts and NGOs that are legally registered by proper authorities.
Public Trusts are usually religious and this type of trust is most registered in our country. It works for spiritual, religious, and philanthropic reasons and they are not regulated by the Indian Trust Act.
The Religious Endowment Act of 1863 and the religious trusts Act of 1920 lay the rules for the proper functioning of public and religious trusts. Along with these acts, the Bombay Public Trust Act also regulates the working of registered charitable trusts in India.
Benefits Of Registering A Charitable Trust
There are many benefits to registering a charitable trust in India. Some of these benefits are mentioned below:
- It allows a charitable trust to have a legal personality for the purpose of carrying out its charitable activities.
- It allows the trust to receive tax exemptions on donations and gifts.
- It allows the trust to receive tax exemptions for income derived from the charity.
- It enables the trust to receive tax exemptions for income derived from investments.
- It enables the trust to receive tax exemptions for income from the sale of assets.
- It enables the trust to receive tax exemptions for income from trade.
- It enables the trust to receive tax exemptions for income from interest.
- It enables the trust to receive tax exemptions for income from businesses.
- It enables the trust to receive tax exemptions for income from other sources
Registration of Trust in India
A Charitable Trust can start functioning once it is approved by the Registrar and gets its authorization. The process of registration of a Charitable Trust in India is complete only when proper documents are submitted according to the rules & regulations.
If any inadequate or incorrect documents are presented, it can lead to the complete dismissal of the registration application. It is better to gather all the information regarding the registration process and keep the documents ready to prevent any last-minute errors.
The skilled legal experts at Vakilsearch can help you with the online trust registration process in just a few clicks to prevent the rejection of your application for Trust registration.
Some basic documents required of registration or renewal registration of the Trust are trusted deeds, and documents related to information about the president and trustees of the institute. A list of all the documents required for Trust Registration in India has been mentioned later in the article.
If the applicant is not able to present these documents during the renewal process, it might lead to the rejection of the application. We advise you to ensure that the process of registration is done with utmost sincerity and attention.
Renewal Registration of Trust in India
The registered Charitable Trust in India receives some benefits such s tax exemption. 12A/12 AA and 80G deal with these benefits. But to continue these benefits, the trust has to renew its registration.
Charitable trusts and institutions that are already registered under Sections 12A, 12AA, or 10(23C) and have a Section 80G certificate must submit an application in Form 10A for the purpose of re-registration.
The steps to renew the registration of a Charitable Trust are simple.
- Log in to the e-filing portal of the IT department.
- Click on the “Income Tax Forms“. You will find it under the Electronic Files tab.
- Select the name of the form as “Form 10A” and select the relevant assessment year from the drop-down list.
- Select the “prepare and submit online” option in submission mode.
- Fill in all the required details in the form and add the available attachments.
The documents required for Renewal Registration of Trust are:
- A certified copy of the act of creation/establishment of the applicant or a certified document confirming the creation/establishment of the applicant;
- Copy of Registration / Certificate of Incorporation (issued by Registrar of Companies or Registrar of Companies or Charity Commissioner);
- Copy of self-registration under the Foreign Investments Act (Act) 2010 (ie FCRA), if applicable;
- Trust Agreement or Memorandum of Association and Articles of Association obtained independently;
- Copy of section 12A license or section 12AA registration order;
- Copies of self-audited financial statements for the last three financial years and Take note of the company’s activities.
The re-registration you get in this manner will be valid for five years. You can take expert assistance from Vakilsearch to go through the renewal process smoothly.
Conclusion
Charitable trusts are regulated by the government of India. They are a type of charitable trust that is regulated by the government and must be registered with the Income Tax Department. A charitable trust is a trust that has been set up for the purpose of charitable activities.
The experts at Vakilsearch will help you get all the help you need for the renewal registration of your trust. Your charitable trust will get registered easily and the process will be made hassle-free.
FAQs
What is the validity of trust registration?
The validity of trust registration typically varies depending on the jurisdiction and the specific laws governing trusts in that region. In many places, once a trust is registered, it remains valid indefinitely unless it is dissolved or revoked according to the laws governing trusts in that jurisdiction.
What is Form 10A for renewal of trust?
Form 10A is typically used for the renewal of trust registration. Trusts may need to renew their registration periodically to ensure compliance with regulations and to maintain their legal status. This form typically requires updated information about the trust, its activities, and its trustees.
Is Form 10B mandatory for all trusts?
Whether Form 10B is mandatory for all trusts depends on the specific regulations and laws governing trusts in the jurisdiction where the trust is registered. In some regions, Form 10B may be required to be submitted annually to provide details of the trust's income, expenses, and activities.
What is the last date to file Form 10A for trust?
The last date to file Form 10A for trust renewal varies depending on the regulations and deadlines set by the relevant regulatory authorities. Trusts should adhere to the prescribed deadlines to avoid any penalties or issues with their registration status. It's advisable to check with the appropriate regulatory body or legal advisor for the specific deadline applicable to your trust's renewal process.
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