A charitable trust is a legal arrangement in which trustees hold and manage assets for the benefit of the public or a defined charitable purpose.
Step 1: Define the Objects of the Trust
The trust deed must clearly state the charitable objects — education, medical relief, poverty alleviation, environmental conservation, etc.
Step 2: Draft the Trust Deed
The trust deed must include the name, registered office, trustee details, objects of the trust, and rules governing its management.
Step 3: Register the Trust
Public charitable trusts are registered under relevant state legislation at the local Sub-Registrar's office.
Step 4: Apply for 12A Registration
Register under Section 12A/12AB of the Income Tax Act to obtain income tax exemption on the trust's income.
Step 5: Apply for 80G Certification
80G certification allows donors to claim deductions on their contributions, significantly improving fundraising ability.
Step 6: Ongoing Compliance
File annual returns (Form 10B/10BB), maintain proper books, and comply with state-specific legislation.
Proper structuring from the start saves years of corrective effort.