{"id":19598,"date":"2019-04-11T11:01:41","date_gmt":"2019-04-11T11:01:41","guid":{"rendered":"https:\/\/www.legalraasta.com\/blog\/?p=19598"},"modified":"2026-04-07T17:17:03","modified_gmt":"2026-04-07T11:47:03","slug":"charitable-trust","status":"publish","type":"post","link":"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/","title":{"rendered":"A complete guidebook on charitable trust"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Overview\" title=\"Overview\">Overview<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Features_of_a_charitable_trust\" title=\"Features of a charitable trust\">Features of a charitable trust<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Types_of_charitable_trust\" title=\"Types of charitable trust\">Types of charitable trust<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Public_trust\" title=\"Public trust\">Public trust<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Private_trust\" title=\"Private trust\">Private trust<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Some_essential_elements\" title=\"Some essential elements\">Some essential elements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Trust_deed\" title=\"Trust deed\">Trust deed<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Reasons_for_forming_a_trust\" title=\"Reasons for forming a trust\">Reasons for forming a trust<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Conditions_for_forming_a_Public_trust\" title=\"Conditions for forming a Public trust\">Conditions for forming a Public trust<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Conditions_for_forming_a_Private_charitable_trust\" title=\"Conditions for forming a Private charitable trust\">Conditions for forming a Private charitable trust<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.legalraasta.com\/blog\/charitable-trust\/#Stepwise_procedure\" title=\"Stepwise procedure\">Stepwise procedure<\/a><\/li><\/ul><\/nav><\/div>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Overview\"><\/span><strong>Overview<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A charitable trust, as the name suggests is the one where the sole purpose of its incorporation is to uplift people from poverty, to empower women, to eradicate illiteracy, to promote public health and comfort, to further religious practices, and other charitable purposes.<\/p>\n<p>Benevolent and philanthropic purposes are not compulsorily charitable unless it is specifically for the benefit for masses or group of people.<\/p>\n<blockquote>\n<p>Get a complete list of Indian NGOs by visiting <a href=\"https:\/\/www.giveindia.org\/certified-indian-ngos\" target=\"_blank\" rel=\"noopener noreferrer\">www.giveindia.org<\/a><\/p>\n<\/blockquote>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Features_of_a_charitable_trust\"><\/span><strong>Features of a charitable trust<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>A charitable trust, unlike private institution, has perpetual existence and are exempted from laws against perpetuity.<\/li>\n<li>These are partially or completely exempted from taxes.<\/li>\n<li>If the purpose of a charitable trust becomes impossible to carry out, then under the legal doctrine of cy\u00a0pr\u00e8s (French for as near as), the court or trustee acting by the majority can choose another purpose. This should be as near as the original purpose of the trust.<\/li>\n<\/ul>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Types_of_charitable_trust\"><\/span><strong>Types of charitable trust<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Public_trust\"><\/span>Public trust<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>This is an express trust made to benefit the body of the public.\u00a0The Charitable and Religious Trust Act, 1920, the Religious Endowments Act, 1863, the Charitable Endowments Act, 1890, the Bombay Public Trust Act, 1950 are some of the acts that govern the public trust.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Private_trust\"><\/span>Private trust<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In this case, the beneficiaries are narrow and divided into specific groups. Like the employees of an organization. These are governed by the\u00a0Indian Trusts Act, 1882.<\/p>\n<blockquote>\n<p>To get the complete details of the Indian Trusts Act, 1882, click <a href=\"https:\/\/www.legalraasta.com\/blog\/wp-content\/uploads\/2019\/04\/THE-INDIAN-TRUSTS-ACT-1882.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>.<\/p>\n<\/blockquote>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Some_essential_elements\"><\/span><strong>Some essential elements<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li style=\"text-align: left;\"><strong>An Author-<\/strong> who creates the trust from his\/her property<\/li>\n<li style=\"text-align: left;\"><strong>Trustee-<\/strong> the person responsible for trust property<\/li>\n<li><strong>Beneficiary-<\/strong> the one who is benefiting from this property<\/li>\n<li><strong>Trust Property-<\/strong> the property used for the benefits<\/li>\n<li><strong>An objective-<\/strong> clear intent for the formation of the trust<\/li>\n<\/ul>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Trust_deed\"><\/span><strong>Trust deed<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>You could form a trust without any written documentation as there is no need for trust deed. But in some cases it is desirable and in some, it is required to form a written document.<\/p>\n<p>Like, in case of a private trust pertaining to immovable property (building), the trust deed is a requirement. But in the case of public trust for immovable property, the deed is desirable.<\/p>\n<blockquote>\n<p>To get an idea of the format of trust deed, click <a href=\"https:\/\/www.legalraasta.com\/blog\/wp-content\/uploads\/2019\/04\/Trust-Deed-Format.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>.<\/p>\n<\/blockquote>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Reasons_for_forming_a_trust\"><\/span><strong>Reasons for forming a trust<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>To discharge the sentiments of the author by the means that ensure public benefit<\/li>\n<li>For claiming tax exemption benefits.<\/li>\n<li>A trust could ensure proper management and preservation of property<\/li>\n<li>To regulate the affairs of the\u00a0provident fund, superannuation fund or gratuity fund or any other fund constituted for the benefit of the employees.<\/li>\n<li>For the benefit of the family members\/relatives, that are dependant on the settlor of the trust.<\/li>\n<\/ul>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Conditions_for_forming_a_Public_trust\"><\/span><strong>Conditions for forming a Public trust<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The procedure to form a private trust differs from the procedure to form a public trust. It is because public trust is governed by general law and private trust is governed by the Indian Trusts Act,1882. Public trust can be formed either as a society or under <a href=\"https:\/\/www.legalraasta.com\/blog\/need-know-section-8-company\/\" target=\"_blank\" rel=\"noopener noreferrer\">section 8<\/a> of the company. It takes the form of a trust when the people involved are less. Usually one or two.<\/p>\n<blockquote>\n<p>Also read the\u00a0<a href=\"https:\/\/www.legalraasta.com\/blog\/difference-section-8-company-and-trust\/\" target=\"_blank\" rel=\"noopener noreferrer\">difference between Section 8 Company and Trust<\/a><\/p>\n<p>Visit this link to register your company under<a href=\"https:\/\/www.legalraasta.com\/section-8-company-registration\/\" target=\"_blank\" rel=\"noopener noreferrer\"> section 8\u00a0<\/a><\/p>\n<p>Must read to know all about <a href=\"https:\/\/www.legalraasta.com\/blog\/society-registration\/\" target=\"_blank\" rel=\"noopener noreferrer\">society registration<\/a><\/p>\n<\/blockquote>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Conditions_for_forming_a_Private_charitable_trust\"><\/span><strong>Conditions for forming a Private charitable trust<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The most important condition is for the author to give written\/verbal confirmation or by performing an act, indicating the intention for the formation (if there is any). If the trust deed is verbal, then the author should clearly imply the intention to create the trust. No formal words are necessary. But in such a case the author should<\/p>\n<ul>\n<li>Intend to form a trust binding in law on himself or to the person to whom the property is given<\/li>\n<li>Intend to bind a definite property for the trust<\/li>\n<li>have the intention to benefit a person or a group in a specific way<\/li>\n<\/ul>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Stepwise_procedure\"><\/span><strong>Stepwise procedure<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>Form a trust document stating the type of trust it would be.<\/li>\n<li>Then, submit it to a legal firm or a bank<\/li>\n<li>This document should also mention the name of the settlor, the trustees and the beneficiaries, as well as a list of all the assets trusts,\u00a0 would hold.<\/li>\n<li>Now, apply for Permanent Account Number of the trust and open a separate bank account of its name.<\/li>\n<\/ul>\n<blockquote>\n<p>Must read to <a href=\"https:\/\/www.legalraasta.com\/blog\/know-your-pan\/\" target=\"_blank\" rel=\"noopener noreferrer\">know your PAN\u00a0<\/a><\/p>\n<\/blockquote>\n<ul>\n<li>You can register this trust if there is a transfer of immovable property to this trust.<\/li>\n<\/ul>\n<p>According to section 6 of the Indian Trusts Act, 1882, a trust is created when the author indicates the following by either word or by an act<\/p>\n<ul>\n<li>The intention behind the trust<\/li>\n<li>The purpose behind the trust<\/li>\n<li>Beneficiary<\/li>\n<li>Trust property<\/li>\n<li>If the author transfer the trust property to the trustee<\/li>\n<\/ul>\n<p>To avail, great services like <a href=\"https:\/\/www.legalraasta.com\/msme-registration\/\" target=\"_blank\" rel=\"noopener noreferrer\">MSME registration<\/a>, <a href=\"https:\/\/www.legalraasta.com\/register-nidhi-company\/\" target=\"_blank\" rel=\"noopener noreferrer\">Nidhi company registration<\/a>, <a href=\"https:\/\/www.legalraasta.com\/nbfc-registration\/\" target=\"_blank\" rel=\"noopener noreferrer\">NBFC registration<\/a> or for<a href=\"https:\/\/www.legalraasta.com\/producer-company-registration\/\" target=\"_blank\" rel=\"noopener noreferrer\"> producer company registration<\/a>, click on any of the tabs. Or you can call us at <a href=\"tel:+918750048585\"><span style=\"color: #0000ff;\">+918750048585 <\/span><\/a>. You can also email us at <a href=\"mailto:contact@legalraasta.com\" target=\"_blank\" rel=\"noopener noreferrer\">contact@legalraasta.com.\u00a0<\/a>You can also visit our website <a href=\"https:\/\/www.legalraasta.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">LegalRaasta<\/a><\/p>\n<blockquote>\n<p>Related articles<\/p>\n<p><a href=\"https:\/\/www.legalraasta.com\/blog\/importance-of-msme\/\" target=\"_blank\" rel=\"noopener noreferrer\">Why MSME is important in India<\/a><\/p>\n<p><a href=\"https:\/\/www.legalraasta.com\/blog\/register-nidhi-company\/\" target=\"_blank\" rel=\"noopener noreferrer\">Registration process of Nidhi company<\/a><\/p>\n<p><a href=\"https:\/\/www.legalraasta.com\/blog\/non-banking-financial-company\/\" target=\"_blank\" rel=\"noopener noreferrer\">An overview on Non Banking Financial Company<\/a><\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Overview A charitable trust, as the name suggests is the one where the sole purpose of its incorporation is to uplift people from poverty, to empower women, to eradicate illiteracy, to promote public health and comfort, to further religious practices, and other charitable purposes. Benevolent and philanthropic purposes are not compulsorily charitable unless it is specifically [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":19609,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[558],"tags":[2813,2822,2821,2817,2814,2816,2823,2815,2819,2820,2824,2818],"class_list":["post-19598","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-others","tag-charitable-trust","tag-conditions-for-forming-private-trust","tag-conditions-for-forming-public-trust","tag-essential-elements-of-charitable-trust","tag-features-of-charitable-trust","tag-private-trust","tag-procedure-to-form-a-trust","tag-public-trust","tag-reasons-to-form-a-charitable-trust","tag-reasons-to-form-a-trust","tag-stepwise-procedure-of-forming-a-trust","tag-trust-deed"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin 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