Trust / Society

01 About the Charitable Trust / Society

Trusts and societies are the usual forms for non-profit work: schools, hospitals, gaushalas, religious places, welfare and community organisations.

A trust is created by a trust deed and run by trustees. A society is an association of members registered under the societies law and run by an elected governing body. A Section 8 company is a third option for larger non-profits.

02 Benefits

• Suited to charitable, educational, religious and social objects, and recognised by government departments and donors.
• Income can be exempt from tax after registration with the Income Tax Department, provided it is applied to the institution's objects.
• With approval, donors can claim a deduction for their donations, which helps fund-raising.
• Can receive grants and, once eligible, CSR funds from companies.
• Continues beyond the founders; property is held for the institution's purposes.

03 Must understand before creating

• Income and property cannot be used for the personal benefit of founders, trustees or their relatives.
• Tax exemption depends on registration and its renewal (generally every five years), on applying most of the income each year (currently 85%) to the objects, and on audited accounts and timely returns.
• Foreign contributions need separate registration under the FCRA.
• Strict rules on cash and anonymous donations, accumulation of income and investments.
• Hard to wind up: remaining assets must go to another similar institution, not back to the founders.
• A society depends on members and elections; internal disputes can stall its working.

Usually needed to register: Trust deed or memorandum and rules/bye-laws, identity and address proofs of trustees or members, and proof of the registered office.

04 Send your requirement

Tell us about the business you plan to set up. Your details go to our office by email and we will get back to you.