The Indian Trusts Act of 1882 has been utilised for the registration of numerous charitable trusts in India. These trusts aim to address various issues such as education, healthcare, financial aid and environmental programs. Trust registration involves the legal authorisation of an institute or by the relevant authorities. This legalisation provides several advantages, including tax exemption. This article provides information on “How to renew a Trusts License in India?” and the documents required for trust license renewal.
What is Trust License in India?
Trust registration refers to the process of legally formalising a trusts deed, which is a binding legal agreement between the settler and the trustee, with the appropriate registrar in the jurisdiction. The trust acts as a formal entity responsible for the fair distribution of the settlor’s assets to the beneficiaries. To claim an exemption under section 11, a trust must register under section 12AB of the Income-tax Act of 1961.
What is Trust in an Indian Context?
In India, all registered trusts are governed by the Indian Trust Act of 1882, which simplifies the associated legal requirements. Generally, a trust is defined as a legal arrangement where the owner transfers property to the trustee for the benefit of the beneficiaries.
The objective of a trust is to ensure that the granter’s assets are distributed among the beneficiaries according to the terms stated in the trust deed. Once established, the trusts appoints a trustee who manages the trusts and ultimately distributes the grantor’s assets to the designated beneficiaries. Beneficiaries of trusts in India typically include heirs, family members or charitable organisations. A trust license in India can provide tax savings, streamline or avoid the probate process and protect assets. Different types of trusts in India include revocable, testamentary, irrevocable, charitable, asset security, spendthrift and individual needs trusts.
List of Documents Required to Renew a Trust License in India
To renew license in India, the following self-certified copies of documents must be provided and uploaded with Form No. 10A:
- Memorandum of Association (MoA) or two copies of the trust deed.
- Certificate of Registration.
- Aadhar cards and Permanent Account Numbers (PAN) of the managing trustees.
- Digital signatures of one of the trustees.
- Current valid 12A, 12AA and 80G certificates.
- Foreign Contribution (Regulation) Act (FCRA) certificate or any other relevant certification.
- Annual accounts since incorporation or for the three financial years, including balance sheet, income and expenditure statement, receipts and payments accounts and all relevant schedules.
- When attaching the required documents, ensure that the combined size of all attachments does not exceed 50MB and that no single document is larger than 5MB.
Procedure to Renew Trust License in India
Follow these steps to renew a license in India:
- Visit the webpage at https://www.incometaxindiaefiling.gov.in/home.
- Click on “Login Here.”
- Enter your “User ID,” “Password,” and “Captcha Code.”
- Select “Login.”
- Proceed to e-File > Income Tax Forms.
- From the drop-down list, choose Form 10A, the relevant Assessment Year and the form of submission.
- Click on “Continue.”
- Fill out Form 10A completely and attach the necessary documents.
- Submit Form 10A.
- Note that Form 10A should only be filed with a digital signature if filing an income tax return is required. Otherwise, Form 10A can be submitted using an electronic verification code (EVC).
Conclusion
Trust registration provides legal authorization and tax exemption benefits. Trusts in India operate under the Indian Trusts Act of 1882 and serve as legal arrangements for the fair distribution of assets to beneficiaries. Renewing a trust license in India requires the submission of specific documents and following the prescribed procedure. Trusts funds play a crucial role in promoting charitable activities and are subject to government regulation and registration with the Income Tax Department.
