Trust Registration in India: Public and Private Trusts, Trust Deed and Tax Registration

What is a trust, and how is it created?

A trust is an arrangement in which the author (also called the settlor) transfers property to trustees to hold and manage for the benefit of beneficiaries or for a purpose. Section 6 of the Indian Trusts Act, 1882 says a trust is created when the author shows, with reasonable certainty, an intention to create a trust, its purpose, its beneficiary and the trust property, and transfers the property to the trustee.

The trust deed is the document that records these elements. It names the author, the trustees and the beneficiaries or purpose, describes the property settled, and sets out the trustees' powers, how trustees are appointed and replaced, how income is applied and what happens if the trust is dissolved.

A trust is not a separate legal person in the way a company is. The trustees hold the property and act for the trust. That is why the deed's provisions on trustee powers, decision-making and succession of trustees matter as much as the statement of purpose.

What is the difference between a public and a private trust?

A public trust is created for the benefit of the public or a section of it, such as a charitable, educational, medical or religious purpose. A private trust benefits specific, identifiable persons, such as members of a family. The difference decides which laws apply, how the trust is taxed and whether it can seek charitable registration.

Private trusts are governed by the Indian Trusts Act, 1882. Section 1 of that Act says it does not apply to public or private religious or charitable endowments, so public charitable trusts are governed by general trust principles, the deed and, in some states, a dedicated public trusts law.

Family trusts are commonly used for succession planning: to hold family investments or property, provide for dependants or keep a family business under consistent control across generations. Charitable trusts are used to run schools, hospitals, scholarships and welfare activities. The same word, trust, covers two very different purposes, so be clear which one you are setting up before drafting the deed.

Is registration of a trust compulsory?

Where the trust property includes immovable property, yes. Section 5 of the Indian Trusts Act, 1882 provides that no trust in relation to immovable property is valid unless declared by a non-testamentary instrument in writing, signed by the author or the trustee and registered, or by the will of the author. A trust of movable property can be declared in writing or by transfer of ownership to the trustee.

Even where the law does not strictly require registration, a registered trust deed is what banks, the Income Tax Department, NGO Darpan and donors expect to see. An unregistered deed is hard to prove, and most institutional processes ask for the registered deed.

Public charitable trusts in states with a separate public trusts law must also register with the authority under that law, often a Charity Commissioner. In states without such a law, the deed registered with the Sub-Registrar is the main legal record of the trust.

How do you register a trust deed with the Sub-Registrar?

Draft the trust deed, print it on stamp paper of the value required by the state stamp law (or pay the stamp duty electronically where the state allows), and have it signed by the author and the trustees before two witnesses. The deed is then presented for registration at the office of the Sub-Registrar having jurisdiction over the trust's registered address or property.

The author and trustees usually need to be present with identity proof, address proof and photographs, along with proof of the trust's registered address. The Sub-Registrar registers the deed and returns a registered copy, which becomes the trust's core document.

Stamp duty and registration fees vary by state and by the property settled. Check the current rates with the state registration department before finalising the deed, especially where immovable property is being transferred into the trust.

What should a trust deed contain?

At minimum, the deed should state the name of the trust, its registered address, the author, the initial trustees, the objects or beneficiaries, the property settled, and the trustees' powers to hold, invest and apply the property. It should also cover how decisions are taken, how trustees resign, are removed or are appointed, and how the trust's accounts are kept and audited.

For a charitable trust that will seek income tax registration, the objects should be clearly charitable or religious and the property should be held under an irrevocable trust for those purposes. Section 332 of the Income-tax Act, 2025 looks at whether property is held for the general public under an irrevocable trust wholly for charitable or religious purposes in India, so vague or mixed objects create problems later.

For a family trust, the deed should identify the beneficiaries with certainty, say how income and capital are distributed, and deal with events such as the death or incapacity of a trustee or beneficiary. Whether the trust is revocable or irrevocable, and whether shares are fixed or discretionary, has a direct effect on how its income is taxed.

What registrations does a charitable trust need after the deed?

Obtain a PAN for the trust and open a bank account in its name. Then apply for registration as a registered non-profit organisation under section 332 of the Income-tax Act, 2025 (formerly sections 12A and 12AB). A newly formed trust that has not started activities receives provisional registration for three tax years; the application for regular registration follows within the time the section allows.

If the trust wants donors to get a tax deduction, it needs separate approval under section 354 (formerly section 80G(5)); donors then claim their deduction under section 133 (formerly section 80G). Registrations granted under the 1961 Act continue until their validity ends and must then be renewed under the 2025 Act, at least six months before expiry.

Register on NGO Darpan to obtain a Darpan ID, which is needed for government grants, FCRA registration and bank accounts for non-profits. If the trust plans to receive foreign contribution, FCRA registration or prior permission is required before accepting it.

Trust, society or section 8 company: which suits a non-profit?

A trust is the simplest structure to form and suits activities run by a small group of founders, such as a family foundation or a single school or scholarship fund. A society suits member-driven organisations with elected governance. A section 8 company suits larger organisations, foreign donors or partners who expect company-style governance and regulatory oversight.

The choice also affects how easily the organisation can change its objects, add or remove members, raise institutional funding and wind up. Our guide on section 8 companies compares the three structures in more detail.

Whichever structure you choose, income tax registration, Darpan, accounts, audit and annual returns follow. Plan who will handle these from the start, because charitable registrations can be cancelled for non-compliance.

Public charitable trust or private family trust?

How to register a trust in India

1. Decide the type of trust

   Choose between a public charitable trust and a private family trust, and settle the purpose, trustees and property.

2. Draft the trust deed

   Cover objects or beneficiaries, trust property, trustee powers, appointment and removal of trustees, accounts and dissolution.

3. Stamp and sign

   Pay stamp duty under the state stamp law and sign before two witnesses.

4. Register with the Sub-Registrar

   Present the deed at the jurisdictional Sub-Registrar office with identity and address proof of the author and trustees.

5. Complete follow-on registrations

   Obtain PAN and a bank account; for a charitable trust, apply under section 332 (formerly sections 12A and 12AB), and under section 354 (formerly section 80G(5)) if needed, and register on NGO Darpan.