Charitable Trust Registration in India | Savlana Init

Trust Registration · Charitable Trust

Charitable Trust — Serve a Purpose. Earn the Exemption.

CA assistance for Charitable Trust registration in India — trust deed drafting, Charity Commissioner registration, Section 12A income tax exemption, 80G donor deduction, Form 10BD, and annual ITR-7 filing.

A Charitable Trust is a public trust established for charitable purposes — education, medical relief, poverty alleviation, environmental conservation, or other public benefit activities. It is one of the three main legal structures available for non-profit operations in India, alongside Section 8 Companies and Societies. A charitable trust is created by a trust deed and registered with the Sub-Registrar or the state Charity Commissioner (in states that have specific Public Trust Acts).

The most significant benefit of a charitable trust over an unregistered organisation is its ability to obtain Section 12A and 80G registrations from the Income Tax Department. Section 12A exempts the trust's income from income tax, provided the income is genuinely applied for charitable objects and the trust meets the investment and activity norms prescribed by the Income Tax Act. Section 80G allows donors — individuals and corporates — to claim a tax deduction of 50% of their donation amount, which is a powerful fundraising tool, particularly for corporate CSR contributions.

We assist with the complete charitable trust lifecycle — advising on the correct objects clause for 12A eligibility, drafting the trust deed, registering with the Charity Commissioner or Sub-Registrar, applying for 12A and 80G with the Income Tax Department, filing the annual statement of donations in Form 10BD, issuing Form 10BE donation certificates to donors, and filing the annual ITR-7. We also advise trustees on the compliance obligations under Section 11 of the Income Tax Act and the restrictions on commercial activities and fund accumulation.

Our Charitable Trust Services

Trust Deed Drafting

Drafting the charitable trust deed with correctly framed objects clause for 12A eligibility, trustee powers, succession, and amendment provisions.

Charity Commissioner / Sub-Registrar Registration

Registration with the state Charity Commissioner or Sub-Registrar as required by the applicable state Public Trust Act.

Section 12A Registration (Form 10A)

Application to the Income Tax Department for Section 12A registration to exempt the trust's charitable income from income tax.

80G Registration

Application for 80G approval authorising the trust to issue 80G certificates to donors for tax deduction on donations.

Form 10BD — Statement of Donations

Annual filing of Form 10BD with the Income Tax Department listing all donations received during the financial year.

Form 10BE — Donor Certificates

Issuing Form 10BE donation certificates to each donor as required for donors to claim their 80G deduction.

ITR-7 Annual Filing

Annual income tax return filing in ITR-7, including computation of income applied for charitable purposes and Section 11 exemption.

Section 11 Compliance Advisory

Advisory on income application requirements, permissible accumulation (15%), investment norms, and restricted activities under Section 11.

Our Process

Objects & Eligibility Assessment

We review the proposed charitable activities to ensure they qualify for 12A registration and frame the objects clause accordingly.

Trust Deed Drafting & Registration

The trust deed is drafted, executed on stamp paper, and registered with the Charity Commissioner or Sub-Registrar.

Section 12A & 80G Applications

Form 10A applications for 12A and 80G are filed with the Income Tax Department. Provisionally approved trusts commence operations.

PAN, Bank Account & Operations

PAN is obtained; the trust opens a bank account and commences charitable activities within the permitted scope.

Annual Compliance Management

ITR-7, Form 10BD, Form 10BE, and Charity Commissioner annual returns are filed on time every year.

Why It Matters

✓Section 12A registration exempts all charitable income from income tax

✓80G registration enables donors to claim tax deduction — critical for CSR

✓Objects clause framed to ensure 12A eligibility from day one

✓Form 10BD and 10BE donor compliance managed annually

✓ITR-7 filed with correct Section 11 exemption computations

✓Charity Commissioner annual returns filed as required by state law

✓Section 11 income application norms and accumulation limits advised

✓Corporate CSR contribution eligibility secured through 80G registration

Frequently Asked Questions

A charitable trust is a public trust formed for charitable, religious, educational, or medical purposes, governed by a trust deed and registered under the applicable state law or the Indian Trusts Act. It is created by the settlor/founder transferring property or a corpus to trustees who manage it for the public benefit.

The Income Tax Act defines charitable purposes to include relief of the poor, education, yoga, medical relief, preservation of environment and monuments, and any other object of general public utility. Activities that are primarily commercial in nature or primarily for the benefit of a particular religious community do not qualify as charitable purposes for 12A purposes.

Under Section 11, a charitable trust must apply at least 85% of its income to charitable objects in the same financial year to claim the income tax exemption. Up to 15% can be accumulated without restriction. If more than 15% needs to be accumulated, the trust must obtain approval under Section 11(2) and invest the accumulated amount in specified securities.

A charitable trust can undertake incidental business activities directly related to its charitable objects — for example, a hospital trust running a pharmacy, or an educational trust running a bookstore. However, if the commercial activity is not substantially related to charitable objects, the income from it is not eligible for Section 11 exemption and is taxed at normal rates.

No. 80G registration is optional. A trust can operate with 12A registration (income tax exemption) without 80G. However, without 80G, donors cannot claim tax deductions on their donations. For trusts seeking corporate CSR contributions, 80G registration is effectively mandatory since Section 135 of the Companies Act requires that CSR contributions be made to entities with 12A and 80G registration.

Form 10BD (statement of donations received) must be filed annually by 31 May of the following financial year, covering all donations received during the year for which 80G deduction certificates will be issued. After filing 10BD, the trust issues Form 10BE to each donor — which the donor uses to claim the deduction in their income tax return.

Ready to register your charitable trust?

We draft the trust deed, register with the Charity Commissioner, obtain 12A and 80G, file Form 10BD, and manage annual ITR-7 — so your charitable trust is tax-exempt and donor-ready from day one.