Why is it necessary to set up a public trust?
Public trust is formed for the benefit of the general public. It must be clearly stated in the trust deed what its purpose is. Public trusts are generally created for establishing schools, colleges, other educational institutions, hospitals, old age homes, orphanages, children’s healthcare centers, institutions for empowering women and children, the welfare of underprivileged sections of society, and fulfillment of Corporate Social Responsibility (CSR) by businesses under section 135 of the Companies Act.
A trust registration application form has been prescribed?
Trust Deed Registration is the same as Trust Registration. While private trusts are registered under the Indian Trusts Act, public trusts are registered under state-specific trust registration process. Each state has a distinct process and application for registering a public trust, whereas registering a private trust is as simple as registering its deed, and there is no need to file a separate application. The KYC document of the trust’s author, trustee, and witnesses to the trust deed signature are the essential documents to register a trust.
Is trust deed registration a requirement for a consultant?
No specific certification from a professional consultant is required for the registration of the Trust deed. Our legal services may, however, be needed if you wish to properly draft the trust deed, schedule an appointment with the registrar of trusts, or for operational assistance when the trust deed is being registered at the registrar’s office.
How do Indian trusts differ from each other?
Following is a list of the different types of Indian Trusts:
- Trusts that are solely used by trustees to hold estates
- A special trust is one that is created with a specific purpose in mind
- An express trust is one created by mutual agreement between two parties
- The parties have implied trust based on their conduct
- General public beneficiaries of a public trust
- A trust in which private individuals are the beneficiaries
- A trust created by law as a result of its implementation
- The creation of a trust is prohibited for what purposes?
According to Section 4 of the Indian Trusts Act, a trust is lawful unless the following conditions are met:
- By law, this is prohibited
- A law’s purpose is defeated
- The fraud is real
- A person or property has been injured
- In the opinion of the court, it is immoral
- Objects to a public policy
Is income tax registration mandatory for Trusts?
Under Section 12AB of the Income Tax Act, trusts are required to obtain Income Tax Registration.
The trustee of a trust can also be the beneficiary.
If a trustee becomes the sole beneficiary of a trust, that would mean that the beneficiary owns the property exclusively for his benefit, which would be counter to the lawful purpose of trusts.
- Minors can benefit trusts, but can they become beneficiaries?
A minor can become a beneficiary of a trust, and the income that he or she receives from the trust is taxable under relevant sections of the Income Tax Act as well.