A trust (under the Indian trusts act 1882) is a legal relationship that occurs when one man, for the benefit of a third person or himself, hands over all or some of his property to another. The author is known as the person who hands over the land, the person who receives it is known as the trustee, and the beneficiary is known as the person who profits from it. For example, a person will create a trust with the directive to provide for his old age from the proceeds of the land by handing over a portion of his land to a friend. For instance, an individual may also create a trust by transferring those bonds he holds to a bank and ordering them to provide his wife with maintenance after his death from the dividends earned on the bonds. There are essentially two forms of laws regulating faith in India: 1) The Indian Trusts Act 1882, which deals with private trusts. 2) The Act of Public Trust of different States concerned with public trusts. These Acts are based on the Indian Trusts Act 1882's general structure.
Author/Trustor/Donor/Settlor (Mr. P)-The individual who originally transfers his property and trusts another person to establish the trust. Trustee (Mr. Q)-The person who acknowledges both the transfer of property and the trust in order to establish the trust. Beneficiary (P's Grand-daughter)-The final beneficiary of the trust who in the near future will benefit from the trust, or the person for whose benefit the trust is established.
Read more about: What is the difference between Section 8 Company and Trust?
Some trusts may be classified as Public cum Private Trusts, whose portion of the profits may be used for public purposes and a portion may go to a private person or individuals. Such trusts shall be eligible for exemption in respect of the portion of income earned by private individuals or persons as private trusts and shall be eligible for exemption in respect of the portion of income received for public purposes in compliance with section 11, given that such trusts have been created before the Income Tax Act of 1961, i.e. before 1-4-1962. Public-cum-private produced on or after 1-4-1963 is not eligible for U/S exemption 11.
In accordance with section 5 of the Indian Trusts Act, in relation to immovable property, a private trust must be formed in writing by a non-testamentary document signed by the trust's author or trustee and registered by the trustee (under Section 17 of the Indian Registration Act). Therefore, it is appropriate to register a trust when it is proclaimed by a non-testamentary instrument. This registration will still be required even though, under the Indian Registration Act, the instrument declaring the trust is exempt from registration. Registration would not be required in the case of a private trust declared by a will, even though it includes immovable property. Registration of trust in relation to a movable property would not be necessary. Registration is optional, but desirable, in the case of public trust, whether in relation to movable property or immovable property and whether produced under a will or inter vivos.
Step: 1 Choosing a Name First of all, choose a specific name for the trust. That name should be new and should not lead to a violation of any type. Step: 2 Define the trustees' number Determine the trust's number of trustees. A minimum of Step: 3 Draft deed for a trust Afterward, the trust deed is drafted. Step: 4 Sub-registrar registration Trustees and the author of the trust must be present at the sub-registrar office with 2 witnesses for the registration of the trust deed. A properly attested copy of the trust deed must be given and registration fees must also be charged. Step: 5 For PAN and TAN, apply Upon the filing of a trust deed, apply for the trust's PAN and TAN and then apply for a bank account.
To conclude, we may assume that the beneficiary is entitled to certain rights under the provisions of the Indian Trusts Act and is equally responsible for any violations as well. There is an equal ratio of privileges to the beneficiary's liabilities. This review also demonstrates that it is compulsory for the receiver to preserve good cooperation with the trustee, in order to save himself from any violation of the trust. It should be noted that, in the event that the trust is interested in receiving funds, it must meet certain eligibility requirements. A trust should have an enlisted trust deed that is valid. Consider reading our blogs if you need more information on trust registration or related rules. For NGO Registration – in Trust, Society and Section 8 company. Log into our website LegalRaasta .
An experienced professional, Sakshi Sachdeva has been instrumental in propelling Legal Raasta's content creation efforts. Her career path has been varied, with notable stops in the textile, telecom, transportation, and communication sectors. She holds an MCA and an MSc in software degree.