A Trust / NGO has to acquire 12A certificate from the Income Tax Department. This exempts them to pay income tax for the entire lifetime on its surplus income.
Also, an NGO must obtain 80G certificate. This certificate allows donors, that is persons or organizations making donations to an 80G certified NGO, to avail deduction.
Registration Process for Public Charitable Trust
• Choose an Appropriate Name for the Trust
• Decide the Settlers or Authors and Trustees of the Trust
There is no limit on the maximum number of trustees. But a minimum of two trustees are necessary to form a Trust.
Also, the author generally cannot be the trustee. And he needs to be a resident of India.
• Formulate Memorandum of Association (MOA) and Trust Deed of your Trust
A Trust Deed is legal evidence of your Trust’s existence and it contains the rules and regulations of your Trust. This document also contains the bylaws regarding the changes, removal or addition of the Trustees.
Memorandum of Association (MOA) on the other hand represents the charter of the Trust. It defines the relationship of the Trustor with the Trustees and specifies the objectives for which such a Trust is formed. Such a document should contain the names, addresses and occupations of all the members along with their signatures.
• Documents Required to be Submitted at the Time of Registration
– Trust Deed
– Self attested copy of the proof of identity of the settler (Aadhaar card, passport, voter ID, driving license or any such photo ID)
– Self attested copy of the proof of identity of each trustee (Aadhaar card, passport, voter ID, driving license or any such photo ID)
– PAN card
– Proof of the registered office address of the Trust (electricity/water bill or registration certificate)
– Non Objection letter signed by the landowner
• Prepare Trust Deed on a Stamp Paper
The value of this stamp paper is of a certain percentage of the total value of the Trust’s property.
In addition to this, you need to pay a fee of Rs. 1100. Out of this amount Rs. 100 is the registration fee and Rs. 1000 are the charges of keeping a copy of the Trust Deed with a sub – registrar.
Once you submit the papers, you can collect a certified copy of the Trust Deed within one week’s time from the registrar’s office.
• Submit the Trust Deed with The Registrar
After receiving a certified copy of the Trust Deed, submit the same along with properly attested photocopies with the local registrar.
Further, the settler must put his signatures on every page of the photocopy of the Trust Deed.
Also, it is mandatory for the settlers as well as two other witnesses to be physically present along with their identity proof (original as well as self attested photocopy) at the time of registration. However, physical presence of Trustees is debatable.
• Obtain the Registration Certificate
After submitting the Trust Deed with the registrar, the registrar retains the photocopy and returns the original registered copy of the Trust Deed.
Then, after completing all the formalities registration certificate is issued within a minimum of seven working days.
Reference: Income Tax Act