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Need for Registration of A “Charitable & Religious Trust”

For a public trust, whether in relation to a movable property or an immovable property the registration is optional but always desirable. From the practical point of view, it is always advisable for charitable trusts to have a proper registered trust deed.


Registration has the following advantages:


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


b)      a registered deed effectuates transmutation of possession. The registration of a trust-deed, in the absence of an intention to the contrary, is enough to convey the title to trust-property to the trustee, even if the trust deed is not delivered to him;


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


d)      In case of a charitable or religious trust, in relation to an immovable property, for claiming exemption u/s. 11 of 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 (Born.)]


e)      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.


(f)      Under the provisions of sections 11,12,1 2A and 13 read with sections 60 to 63 of the Income-Tax Act, the income of charitable! religious trust is exempt 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.

CONTENT : Assessment of Trust

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