Trust Registration Services Under The Bombay Public Trusts Act, 1950 | CA Dhiraj Ostwa

I am a Chartered Accountant in Pune with extensive experience in trust registration and compliance. Setting up a charitable or religious organization can be legally complex, which makes it essential to clearly understand the trust registration process. In this article, I explain trust registration under the Bombay Public Trusts Act, 1950, covering the basics, eligibility, step-by-step procedure, required documents, benefits, and post-registration compliance.

For professional assistance with trust registration, Income Tax Return filing, or GST registration in Pune, you may connect with CA Dhiraj Ostwal.

Trusts and Their Importance

A trust is a legal arrangement where a person (called the settlor) sets aside money or property to be managed for a specific public purpose, such as education, religion, healthcare, or social welfare. Trusts can continue fulfilling these objectives even after the settlor’s lifetime.

Registering a trust is crucial because unregistered trusts lack legal recognition. A registered trust can:

• Own property in its own name
• Receive donations legally
• Avail income tax exemptions
• Deal with government authorities and donors smoothly

In Pune, many trusts are formed to support education, healthcare, and rural development. Registration ensures these activities are credible, structured, and legally compliant.

Understanding the Bombay Public Trusts Act, 1950

The Bombay Public Trusts Act, 1950, came into force on 21 August 1950 to regulate and monitor public trusts under a unified legal framework.

A public trust is created when money or property is donated for a charitable or religious purpose that benefits the public or a section of the public.

Key Features of the Act

• Charity Commissioner
  The Charity Commissioner is the governing authority responsible for trust registration, audits, inspections, and dispute resolution. In Maharashtra, all public trusts fall under this authority.
• Applicability
  The Act applies to Maharashtra, Gujarat, and certain areas of Madhya Pradesh. All public trusts in Pune must comply with this Act.
• Regulatory Control
  Trusts must maintain proper accounts, submit annual reports, and use funds strictly for their stated objectives. Non-compliance can result in penalties, removal of trustees, or cancellation of registration.

As a CA in Pune, I regularly advise clients on how trust laws interact with income tax provisions, such as 12AB registration, which enables tax exemptions under the Income Tax Act.

Types of Trusts under the Act

1. Charitable Trusts

These trusts focus on public welfare activities such as:

• Education
• Medical relief
• Poverty alleviation
• Promotion of art, culture, or science

2. Religious Trusts

Religious trusts are established to support and maintain places of worship such as temples, mosques, churches, or gurudwaras. Their purpose must benefit the public, not private individuals.

3. Mixed Trusts

Mixed trusts combine charitable and religious objectives, such as educational institutions run by religious organizations. These trusts must carefully balance both purposes.

Eligibility and Requirements for Trust Registration

• Minimum Trustees: At least two trustees (recommended 3–7 for efficient management)
• Settlor: Can be an Indian resident, NRI, or even a company
• Beneficiaries: Must be the public or a sizeable section of the public
• Trust Property: Can be cash, land, shares, or any asset of value (even ?1,000 is sufficient)
• Age & Capacity: Trustees must be 18+, of sound mind, and not insolvent or convicted

Due to high real estate costs in Pune, many trusts begin with monetary contributions. If a trust supplies taxable goods or services, GST registration in Pune may also be required.

Step-by-Step Procedure for Trust Registration

1. Drafting the Trust Deed
   The trust deed is the most important document and must include:
   • Name and address of the trust
   • Objectives
   • Details of trustees and settlor
   • Trust property
   • Rules and management structure

The deed must be executed on stamp paper and notarized.

2. Filing Application (Schedule II)
   The application is submitted to the Deputy or Assistant Charity Commissioner having jurisdiction (Pune region).
3. Submission of Documents & Affidavits
   Trustees must submit affidavits confirming their consent and eligibility.
4. Inquiry by Charity Commissioner
   If there are no objections, the authority conducts a verification inquiry.
5. Registration Certificate
   Upon approval, the trust is entered into the Public Trusts Register, and a registration certificate is issued.

The process typically takes 2 to 6 months. Online filing is now available through the Charity Commissioner’s portal in Maharashtra.

Documents Required for Trust Registration

• Trust Deed (original)
• Affidavits from trustees
• PAN & Aadhaar of trustees
• Address proof of trust office
• Property documents or bank statements
• Passport-size photographs
• NOC from landlord (if rented premises)
• Memorandum of objectives

Fees for Trust Registration

• Application Fee: 100 to 1,000 (depends on value of trust property)

Benefits of Registering a Trust

• Legal Recognition
  The trust becomes a separate legal entity capable of owning property and entering contracts.
• Tax Exemptions
  Registration enables application for:
  • 12AB (income tax exemption)
  • 80G (donor tax deduction)
  • 10(23C) (if applicable)
• Government Grants & Funding
  Eligible to apply for government schemes and CSR funding.
• Asset Protection
  Trust property is legally safeguarded from misuse.

As a Chartered Accountant in Pune, I help clients maximize these benefits through accurate ITR filing and compliance management.

Post-Registration Compliance

Registration is only the beginning. Ongoing compliance includes:

• Filing audited accounts by 30th September
• Submitting Change Reports for trustee changes
• Maintaining proper books of accounts
• Paying 2% contribution to the Public Trusts Administration Fund

Non-compliance may result in penalties or removal from the register. I regularly assist clients in correcting such compliance errors and ensuring smooth operations.

Case Studies

• A Pune-based women’s education trust (2020) obtained 80G registration, raised over ?50 lakhs in donations, and managed taxes efficiently through proper compliance.
• A religious trust received land grants for temple maintenance after obtaining legal recognition through registration.

Professional guidance from a Chartered Accountant in Pune like CA Dhiraj Ostwal ensures hassle-free registration and long-term compliance.

Conclusion

Trust registration under the Bombay Public Trusts Act, 1950 is essential for establishing a legally recognized and effective public trust in Maharashtra. While the process requires patience and attention to detail, it provides long-term credibility, tax benefits, and operational stability.

Seeking professional assistance from experienced lawyers or accountants can significantly simplify the process and help your trust make a meaningful and lasting impact.