12A Registration for Trust or NGO

12A registration is one time exemption obtained by most Trusts, right after incorporation to be exempted from paying income tax. Section 8 Company, Trusts and NGOs having 12A registration enjoy exemption from paying income tax on the surplus income of the Trust or NGO. Income tax exemption is available for all non-profit NGOs. Hence, it is important for all Trusts, NGOs and other Not-for-Profit organizations to be aware of Section 12A of Income Tax Act and obtain the same, soon after incorporation of the Trust or NGO. In this article, we look at the procedure for obtaining 12A registration in India.

• Benefits of 12A Registration

The benefits of Section 12A Registration are as follows.

• The fund that is used for the charitable or religious purposes is considered to be the income application. The income application is nothing but the expenses used for charitable or religious purposes when calculating the income of the trust.
• The income received will be free from taxation.
• The person registered under this section can avail benefits for accumulating or setting aside income which is not more than 15% for the charitable or religious purposes.
• The accumulation of income that is considered to be the income application according to Section 11(2) will not be included in the total income.
• NGOs are entitled to receive grants and funds from various agencies. These agencies are entrusted to provide grants to 12A registered NGOs.
• The Finance Act 2014 has extended benefits of registration for the trusts and institutions that have been registered under Section 12AA.
• The registration that is made under Section 12A, is a one-time registration. Once the registration is made, it will be active till the date of cancellation of the registration. There is no requirement of renewing the registration. Therefore, these benefits can be claimed whenever required by the NGO.

Eligibility for 12A Registration

Only Charitable Trusts, Religious Trusts, Societies and companies that come under Section 8 are eligible for 12A registration. 12A registration is not applicable for Private or Family Trust.

• Form 10A – Income Tax

Charitable Trusts, Religious Trusts, Societies and Section 8 Companies claiming exemption under Section 11 and 12 of the Income Tax Act, must obtain 12A registration. Private or family trusts are not allowed such exemptions and cannot obtain 12A registration. The process for applying for 12A registration and Form 10A filing has been made online only with the digital signature of the signatory. To obtain 12A Registration, an application in Form 10A for registration of charitable or religious trust or institution must be made online to the Commissioner of Income Tax along with the following documents.

1. Where the trust is created, or the institution is established, under an instrument, self-certified copy of the instrument creating the trust or establishing the institution;
2. Where the trust is created, or the institution is established, otherwise than under an instrument, self-certified copy of the document evidencing the creation of the trust, or establishment of the institution;
3. Self-certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be;
4. Self-certified copy of the documents evidencing adoption or modification of the objects, if any;
5. Where the trust or institution has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up;
6. Note on the activities of the trust or institution;
7. Self-certified copy of existing order granting registration under section 12A or section 12AA, as the case may be; and
8. Self-certified copy of order of rejection of application for grant of registration under section 12A or section 12AA, as the case may be, if any.

Documents Required for 12A Registration

The following documents must be submitted by the 12A registration applicant in Form 10A:

• Certified copy of the instrument under which the trust/institution was created/established, if applicable
• Certified copy of the document evidencing the creation of the trust or the establishment of the institution, if applicable
• Certified copy of registration with ROC/Registrar of Firms & Societies/Registrar of Public Trusts, whichever applicable
• Certified copy of the documents evidencing adoption or modification of the objects, if any
• Certified copy of the annual reports of the trust/institution for a maximum three immediately preceding financial years, if applicable
• Note on activities
• Certified copy of existing order granting registration under section 12A or section 12AA, if any.
• Certified copy of order of rejection of application for grant of registration under section 12A or section 12AA, if any.

For further Information contact with us or visit some official recognized Website:

RegistryWala : – https://registrywala.com

B. Pramanik & Associates:- https://bpramanikassociates.in

Banshi Professional & Management Services Private Limited:- https://banshiprofessional.com

Call or Whatsapp us: +91 6289064067 / 9339055647 / 6291316573

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There are certain forms of organization which is created, with an aim of providing services to the members, rather than earning a profit. Trust and society are two such organizations. Trust is a legal arrangement in which a person holds property for the sake of some other person. Society is an association of person, who come together to fulfill any particular purpose, described under the act.

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The basic distinguishing feature in the two legal persons is the purpose for which they are created, and once you know the purpose, you can easily differentiate a trust and a society.

To create a trust, there must be at least two persons required, whereas a minimum of seven members are required to set up a society. In this article excerpt, you will find all the substantial differences between trust and society, take a read.

Comparison Chart

BASIS FOR COMPARISON	TRUST	SOCIETY
Meaning	A legal relationship, in which author assigns property to the trustee for the benefit of the beneficiary.	A Society is an organized group of persons, who are joined together for fulfilling any purpose relating to literature, science or charity.
Statute	Indian Trust Act, 1882	Society Registration Act, 1860
Fundamental Document	Trust Deed	Memorandum of Association and Rules & Regulations
Minimum Person Required	3	7
Control system	Centralized	Democratic
Governed by	Board of Trustees	Governing Body which should be directors, governors, trustees etc.

 

Definition of Trust

Trust is a legal entity, created by one party, in which the second party has the right to hold the assets of the first party for the benefit of the third party.

Here, the first party refers to the author of the trust or trustor; the second party is known as a trustee, who accepts the proposal of trust and maintains the property of the trustor on behalf of the beneficiary (third party). The subject matter of the trust is known as Trust Property, and the document in which all the terms and conditions regarding the trust are written is known as a Trust Deed.

The trust is governed by the Indian Trusts Act, 1882 which applies to all over the country except the state of Jammu & Kashmir. The following are the types of trust:

• Living Trust: The formation of confidence by the author when he is alive.

• Testamentary Trust: The trust which comes into existence, after the death of the author.

• Revocable Trust: The trust which can be revoked or modified by the author is known as Revocable Trust. Such kind of trust becomes irrevocable if the grantor dies.

• Irrevocable Trust: The trust which is irrevocable in nature is known as an irrevocable trust.

Definition of Society

Society is a group of persons who are associated together for a common purpose. The purpose may be related to promoting any literary, charitable or scientific work.

The incorporation of a society is very simple which requires minimum seven members who sign the memorandum of association (MOA) and then files it to the Registrar of Companies (ROC). In this way, the society is legally formed under the Societies Registration Act, 1860.

The memorandum contains all the details related to the name and the object of the society. In addition to this, the memorandum contains the names, addresses, and profession of the governing body and its members. Committee, governors, directors, council, trustees and others, are the part of the governing body of the society.

Key Differences between Trust and Society

The following are the differences between trust and society:

• A trust is an agreement between parties, whereby one party holds an asset for the benefit of another party. Society is a collection of persons, who come together for the initiating any literary, scientific or charitable purpose.
• Trusts are registered under Indian Trusts Act, 1882 while Societies are incorporated under the Indian Societies Act, 1860.
• There can be minimum two members in a Trust, whereas there should be minimum seven members in society.
• Trust Deed is the root document, in the case of Trust, but in the case of the Society, the details are provided in the Memorandum of Association and Rules & Regulations.
• There is a single man control in trust. However, there exist a democratic control in the society where decisions are taken by voting.
• The board of management of trust contains trustees, but in the case of society, there is a governing body which comprises of committee, trustees, council, directors, governors, etc.

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Conclusion

The purpose for which a trust is created is that a person will hold the property of another person for the benefit of a third person while society is set up to promote any scientific, literary, charitable and similar another objective. The purpose of the two differentiates them.

_{For further Information contact with us or visit some official recognized Website:}

_{RegistryWala : – https://registrywala.com}

_{B. Pramanik & Associates:- https://bpramanikassociates.in}

_{Banshi Professional & Management Services Private Limited:- https://banshiprofessional.com}

_{Call or Whatsapp us: +91 6289064067 / 9339055647 / 6291316573}

The first step to register a trust starts with the drafting of a trust deed. The trust deed is to be executed on appropriate non-judicial stamp paper, the rate of stamp duty differs from state to state. The next step is to seek an appointment with the sub-registrar office having jurisdiction based on the registered office of the trust, and the government registration fee is to be paid after that.

On the appointed date the trust deed is presented before the sub-registrar where all trustees need to be present along with two witnesses. The registration process is then undertaken by the office of the sub-registrar, and the registered deed can be collected after a week time. The next logical step shall be to get the PAN and TAN Number allotted for the trust and open a Bank A/c for the trust.

Trust Registration Process

Step – 1

Selection Of Name – First thing is to select a unique name of your trust, the name should not violate or infringes someone else name or trademark.

Step – 2

Drafting Of Deed -The trust deed needs to be drafted wherein the parties to the deed shall be settlor (author of the trust deed), the trustee and the beneficiary.

Step – 3

Trust Registration – A trust deed is a document which requires mandatory registration before the registrar of the trusts having jurisdiction.

Step – 4

PAN, TAN And Bank A/C – After registration of the trust, the next step is to apply for allotment of PAN Number and TAN and thereafter opening of a bank A/c.

Documents Required for Trust Registration

Documentation of the Trust & Trustee

1. Trust Deed on Proper Stamp Value
2. Two Photographs of Partners
3. PAN Card of Each Partner
4. Identity Proof of each Partner
5. Address Proof of Partner
6. Signed Declaration (s) from Partners

Documentation for the Trust Registered Address

1. Proof of Registered Office
2. Utility Bill as proof must be Latest
3. NOC from the owner of premises.

Contact with us for more information – +91 9339055647

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B. Pramanik & Associates

(Authorized Trust Registration Consultant in India)

158, Dumdum Road, Kolkata – 700074, West Bengal

Call: +91 9339055647 / 6291316573

NGO Registration Service in India

An NGO can be started under three Acts: Public Trust Act of all states, Indian Societies Act and Companies Act. In India, a Trust, Society, Non-profitable Company all fall under an umbrella term NGO. Income tax exemption is available for all non-profit NGOs.

At RegistryWala, we will help you select the right option and guide you through the entire NGO registration process.

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Acts governing NGO registration process

The national authority in India allows for online registration of an NGO under three laws:

a. Trust under Public Trusts Act of each state (Indian Trust Act 1882).

b. Society under Societies Registration Act 1860

c. Section 8 Company under Companies Act, 2013

Each law defines the formation of a different type of organisation, namely – Trust Registration, Society Registration, and Non-Profit company registration. Choosing the kind of registration procedure for the charitable firm is crucial. Our experts will help select the suitable option that befits your vision and guide you with the online registration process.

Why register an NGO in India?

BENEFITS

Ø The legal status of organizations makes sure they are accountable for all the funds and donations they collect.

Ø A registered NGO thinks works and develops in a systematic manner and functions accordingly. For example, when an individual donates resources to a charitable fund, it is received under the name of the organization and used for the benefit of others. In an unregistered firm, the asset can be received under anyone’s name and used for their own profit.

Ø A company that is registered as an NGO stays within the ethical, social and legal parameters of the society.

Ø The basic requirement for running a company is to have a bank account under its name. In order to open an account, it is mandatory to be registered as a non-profitable organization.

Ø The registration of an NGO will also help in tax exemption once they are registered under Income Tax Authorities.

Registration of NGO in India

TRUST

One possible way in which you can register a Non-Government Organisation is by registering it as a trust. This kind of method is used by NGOs who work with eradicating poverty, giving education and providing medical relief. You might want to note that trusts are irrevocable. This means that they cannot change or terminate without the permission of the court.

Although there is no central law that governs public trusts, many states have its own Public Trust Acts to look into the affairs of the public trust.

SOCIETIES

Societies can be referred to member-based organizations for charitable purposes. They are run by a governing body or a managing committee. Unlike trusts, all societies come under the preview of one law known as Societies Registration Act, 1860. Section 8 Companies

SECTION 8 COMPANIES

Section 8 Company has limited liability and cannot make any profits. It is generally formed for promoting science, art, commerce, charity, religion or any other purpose that is useful to society. When compared to Societies and Trusts, Section 8 Companies have more benefit in the sense that they have more legal standing and better credibility among government bodies and donors.

NGO Registration Methods in India – Trust, Society, or Non-profit Company

A DETAILED PROCESS

In India, anybody is free to do social activities without forming an association or organization. But when an individual wants to create a group that involves volunteers, activities, and resources, it becomes important to have proper management in place. To run such companies, trusts and Societies in the correct manner, a certain set of rules need to be followed.

Essential documents for online society registration & trust registration

Before a registered deed is delivered to an NGO, submission of specific documents is required.

TRUST REGISTRATION

For the trust registration, the following papers are mandatory:

Ø A bill of electricity or water stating the address that needs to be registered.

Ø The identity proof of at least two members of the company. The proof can be:
– Voter ID
– Driving License
– Passport
– Aadhaar Card

It takes about 8 to 10 days for online registration to be completed under the Indian Trust Act – 1882. Before the deed becomes valid throughout the country, the settler has to deliver a presentation at the registrar’s office.

Note: It takes about 8 to 10 days for online registration to be completed. On the date fixed for registration, the Author of the Trust shall be present in the Register Office for registration Society registration

SOCIETY REGISTRATION

For a society registration, the following papers are essential:

Ø The name of the society.

Ø Address proof of the office.

Ø Identity proof of all the nine members which can be:
– Driving License
– Copy of Passport
– Voter ID
– Aadhaar card

Ø Two copies of the Memorandum of Association and By-laws of the society.

Note: It takes about 8 to 10 days for drafting the MOA and By-laws of the Society. Thereafter it takes 21 to 30 days for the Society to be registered.

SECTION 8 COMPANY:

For a Section 8 company registration, the following papers are essential:

Ø The name of the Company for approval.

Ø Address proof of the office. It can be electricity or water bill or house tax receipt.

Ø Identity proof of all the Directors which can be:
– Driving License
– Copy of Passport
– Voter ID
– Aadhaar card

Ø The Memorandum of Association and Articles of Association of the Company.

For further Information contact with us or visit some official recognized Website:

RegistryWala : – https://registrywala.com

B. Pramanik & Associates:- https://bpramanikassociates.in

Banshi Professional & Management Services Private Limited:- https://banshiprofessional.com

Call or Whatsapp us: +91 6289064067 / 9339055647 / 6291316573

• 

• BENEFITS

• The legal status of organizations makes sure they are accountable for all the funds and donations they collect.

• A registered NGO thinks works and develops in a systematic manner and functions accordingly. For example, when an individual donates resources to a charitable fund, it is received under the name of the organization and used for the benefit of others. In an unregistered firm, the asset can be received under anyone’s name and used for their own profit.

• A company that is registered as an NGO stays within the ethical, social and legal parameters of the society.

• The basic requirement for running a company is to have a bank account under its name. In order to open an account, it is mandatory to be registered as a non-profitable organization.

• The registration of an NGO will also help in tax exemption once they are registered under Income Tax Authorities.

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