Trust, one of the types of NGOs in India, is registered under the Trust Act, 1882. Trusts are formed to work for the welfare of the society directly or indirectly. They work in various fields like education, healthcare, financial assistance, environment protection, women empowerment, etc In 2020 section 12AB was added to the Income Tax Act 1961 for the better and effective management of the trust registration. After the insertion of this section, it is necessary for all the trusts to re-register themselves. Form 10A is the form that one needs to fill out to complete the trust re-registration process. In order to keep the activities of the trust valid and lawful re-registration is necessary. Re-registration ensures that trust is followed and works according to the government’s rules and regulations. If one fails to re-register a trust there are a lot of benefits he will not be able to take under the Income Tax Act. According to the recent amendment, it is mandatory for the trust to transfer the registration to section 12AB. In the current blog, everything regarding the trust re-registration process will be discussed
What is Trust?
Under Section 3 of the Indian Trusts Act, 1882 definition of trust has been given with an example. For a better understanding of the trusts and related prohibitions, it is obvious to know about trusts individually. According to Section 3, trust is a responsibility linked to the possession of assets, whether they are movable or immovable.
Types of Trust Registration in India
There are a total of two types of trust registration in India, both of which are given below:
Private Trust
A trust for the benefit of one or more individuals who are out of the scope of public or charitable purposes is called a private trust. Such kinds of trusts are formed for the financial benefit of one or more beneficiaries rather than for the public benefit. They are governed by the Indian Trust Act 1882. Mostly such kinds of trusts are established for family members, relatives, friends, etc. Private trust can be of three types which are given below:
- Revocable Trust
- Irrevocable Non-Discretionary Trust
- Irrevocable Discretionary Trust
Public Trust
Just opposite to the private trust, public trusts are working for the benefit of members of the society and do charity. The beneficiaries of public trust are the entire public, not a private person. Such kind of trust serves the general population irrespective of their caste, creed, religion, sex, and society. Such kinds of trusts are not just governed by the Trust Act 1882. There are many other laws like the Charitable and Religious Trust Act of 1920, Bombay Public Trust Act of 1950, Transfer of Property Act of 1882, Registration Act of 1908, Income Tax Filing Act of 1961 etc. There are two types of public trust which are given below:
- Public Charitable Trust
- Public Religious Trust
What is Form 10A?
Form 10A is a form for the re-registration of trusts in India. This form must be filled out by charitable or religious trusts for completion of the trust re-registration process. To convert the trust registration to section 12AB, the trust re-registration process needs to be completed. Without Form 10A it is not possible. It is a compiled form that replaces the previous forms, Form 10 and Form 10G. The latest form has a total of twenty-one points. It is used for both temporary and permanent registrations. Permanent registration approval is valid for five years. Trusts seeking re-registration must submit an application for renewal at least six months before the prior expiry date.
Information Required in Form 10A
Form 10A has been divided into six parts. The different part has a different set of questions regarding different information. One who wants to complete the trust re-registration process must fill out all six parts. The six parts that are mentioned in the Form 10A are as follows:
- General information of the trust
- Details of registration or previous registration of the trust
- Constitution or establishment of the trust
- Particulars of the trustees, settlors (author of the trust), and beneficiaries
- Details of activities and income of the trust
- Assets and liabilities of the trust
Trust Re-registration Process Under Form 10A
The trust re-registration process is an online process. Form 10A needs to be filed online for re-registration of the trust. Follow the steps given below to complete the trust re-registration process:
- Open the income tax portal
- Login through the PAN card number and the password
- Click on the option of “file” and choose “File Income Tax Forms.”
- The next step is to select “Persons not dependent on any source of income”, here the source of money is irrelevant
- Under tax exemption and relief you will find Form 10A, Click on the same option
- A form will be open on your screen, you need to fill out all the relevant details and attach all the required documents with it
- Select the assessment year through the option of a drop-down menu
- Click on the option of “continue” and then “Let’s Get Started” to fill out the form for further details.
- In the end to complete the form either add a digital signature or an electronic verification code
- Finally, check all the information and submit the form
Documents Required for Trust Re-registration Under Form 10A
To complete the trust re-registration process, one needs to file Form 10A. To complete that form, attachment of some documents is mandatory. Without uploading the necessary document one cannot get re-registration. The list of required documents or trust re-registration under Form 10A is given below:
- Previous registration and incorporation certificate of trust
- PAN Card of the trust
- Digital signatures of the trustee of the trust
- Trust Deed of the previously registered trust
- Memorandum of Association (MoA) and Article of Association (AoA) of the trust
- Annual Account details of the trust
- Self-certified copy of the report of Audit under section 44AB
- Section 12A,12AA, and 80G of the Income Tax Act, Certificates
- If the trust gets funds from foreign then a registration certificate under FCRA is required
Conclusion
Form 10A is an essential document for the trust re-registration process. Charitable organizations seeking registration or re-registration under the Income Tax Act need to file this form called Form 10A. It provides a comprehensive overview of the trust’s constitution, assets, liabilities, and religious activities, among other things. After 2020 registration under Form 10A is necessary to get the benefits associated with the trust. The process of filing this form is a little complicated and not easy to understand. Hence it is advisable to take the help of an expert while filing an application for trust registration or re-registration.
