Registration of Trust Deed Procedure in India



For a public trust, whether in relation to movable property or immovable property, the registration is optional but always desirable. A registered Trust Deed has the following advantages:


a) A registered Trust Deed becomes an official document which carries support and force of law.

b) A registered Trust Deed effectuates transmutation of possession

c) A conveyance of trust property to the trustee under a registered deed is generally not open to challenge.

However, in case of a charitable or religious trust, in relation to immovable property, for claiming exemption U/s. 11of the Income Tax Act, it is essential that the instrument of trust is duly registered [CIT v. Trustees of Dr. Divekar Charity Trust {1977}110 ITR 227 (BOM.)]

Registration of a Trust

Registration of a Trust is required from two angles:

I. Registration under state Act.

II. Registration under Income Tax Act.

No formal deed or any other writing is necessary to constitute a charitable trust. It is legally not necessary to have a written trust deed for the charitable trust/religious trusts, societies, and institutions. From the practical point of view, however, it is always advisable for charitable trusts to have a properly registered trust deed. When the trust deed is reduced into writing with the Registrar, it facilitates exemptions under section 80G of the Income Tax Act for the donors. It may be noted that this is an essential requirement for the purposes of section 80G of the Income-tax Act, 1961.

Under the provisions of sections 11, 12, 12A, and 13 read with sections 60 to 63 of the Income-tax Act, the income of charitable/religious trust is exempted from income tax subject to the fulfillment of certain conditions. Such trust/institutions are entitled to exemption under the Income-tax Act when they are created or established for charitable purposes as defined under section 2 (15) of the Income-tax Act, 1961.

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