Registration of a Trust is mainly required from two angles:
• Registration under State Act
• Registration under Income Tax Act
Other types of registrations associated with a trust, required in certain situations, may be briefly stated as under:
(a) Registration under the Indian Registration Act;
(b) Registration under Public Trusts Act;
(c) Registration under the Foreign Contribution (Regulation) Act.
Registration under the Indian Registration Act
As regards registration under the Indian Registration Act, it may be noted that it is the trust-deed and not the trust which is required to be registered. Thus, for this purpose, a trust deed has to be framed incorporating the necessary provisions for management of the affairs and objects of the trust. This deed has to be registered with the Sub-Registrar of the Registration Department of the respective State Government. Besides, a trust created by a will may also be registered under the said Act by registering the will itself.
A trust-deed should be presented for registration within four months of its execution (Sec.23), in the office of the Sub-Registrar within whose sub district the whole or some portion of the property is situate. (Sec. 28). If a document cannot be prescribed for registration within the aforesaid period, owing to urgent necessity or unavoidable accident, it may be presented for registration within a further period of four months along with a fme which shall not exceed ten times the amount of registration fee (Sec. 25.). Registration fees, as prescribed by the state Government, is payable on presentation of the document. (Sec.78).
A trust deed relating to immovable property must, for the purposes or registration, contain a description of such property, sufficient to identify the same. (Secs.2 1 & 22). If there are any interlineations, blanks, erasures or alterations in a deed, the same must be duly attested by the person(s) executing the deed (Sec.20).
When the Registering Officer is satisfied that the provisions of the Act as applicable to the document presented for registration have been complied with, he shall endorse thereon a certificate containing the word “registered”, together with the number and page of the book in which the document has been copied. Such certificate shall be signed, sealed and dated by the Registering Officer, and shall then be the conclusive evidence that the document has been duly registered. (Sec.60).
Registration under Public Trusts Act
It may be noted that a charitable or religious trust, whether public or private, is not required to obtain registration under the Indian Registration Act. However, in certain states like Maharashtra and Gujarat there is a Public Trusts Act, which obliges such institutions/trusts to get registered as such under the said Act.
For example, according to the Bombay Public Trusts Act, 1950, all charitable and religious institutions are to be registered as Public Trusts and will come under the supervision of the Charity Commissioner of the State.
For details, the relevant state law on trusts, if any, should be consulted.
Registration under Income-tax Act
Charitable or religious trusts and societies, claiming exemption under Section 11 and 12 of the Income-tax Act are required to obtain registration under the Act. Private / family trusts are neither allowed such exemption nor, thus, required to seek registration under the Income-tax Act. However, private trusts partly for charitable or religious purposes, are also eligible and should, thus, obtain registration.
Registration under Foreign Contribution (Regulation) Act, 1976
Any society, trust or charitable company, carrying on educational, charitable, religious, economic, cultural or social welfare activities and desirous of receiving any foreign contribution from a foreign source, is required to obtain registration under section 6(1) of the Act. Any such association which is not registered or which has been denied registration, can receive foreign contribution only alter obtaining prior permission from the Central Government under section 6(1 A) of the Act.