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Creation of a Valid Charitable or Religious Trust

While creating a trust, the author of the trust should remember a few essential characteristics of charitable trusts. Section 6 of the Indian Trusts Act, 1882 lays down, for the purposes of creation of valid private trust, that a trust is created when the author of the trust indicates with reasonable certainty by any words or acts (i) an intention on his part to create thereby trust (ii) the purpose of the trust (iii) the beneficiary; and (iv) the trust property and transfers the trust property to the trustees. The provisions of the Indian Trusts Act, 1882 do not apply to public trusts. However, these certainties are also required to be present for the creation of a public trust as held by the Supreme Court in CIT vs. Thakur Das Bhargava (1960) 40 ITR 301 (SC) : TC 38R.759.


The Rajasthan High Court in Laxminarain Lath Trusts vs. CIT (1987) 65 CTR (Raj) 91: (1988) 170 ITR 375 (Raj) : .TC 23R.763 observed that although the provisions of the Indian Trusts Act as such are not applicable to public trusts in view of section 1 of the Indian Trusts Act, 1882, the principles underlying them, being based on general principles or rules of English law, are applied by the Courts to public trusts also. It further observed that in respect of charities, the Courts apply the doctrine of cy-pres which envisages that where a clear charitable intention is expressed, it will not be permitted to fail because the mode, if specified, cannot be executed and the law will substitute another mode cy-pres, i.e. as nearly as possible to the mode specified by the donor; the said doctrine is applied on the principle that the Court would lean in favor of charity.
CONTENT : Assessment of Trust

Related Topics.....Assessment of TRUST


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