dear friends , some doctors want to create a trust . for which donations will be received from the pharmaceutical companies and others. such donation is for treatment of poor patients. pls let me know the document required for creation of trust and who will sign these documents. complete procedure to create a trust. when tax audit will be applicable to it.
3 Replies
vishnupriya
(CA Final)
(1418 Points)
Replied 23 April 2010
Please go through Sec 12A of Income tax act
(Guest)
Section 12A: Registration of Trust:
Every trust or Institute must apply to CIT for registration u/s.12A in a prescribed form i.e. Form No. 10A within a period of 1 year from date of creation of trust or establishment of institution, as the case may be however delay can be condoned by CIT. However, no such time limit shall apply in case if an application for registration is made at any time on or after 01/06/2007.
Section 12AA: Procedure for registration by CIT:
(1.) Once an application is received from the applicant trust in form no. 10A, CIT may call for further document or information from the applicant trust, in order to satisfy himself about the genuineness of the activities and objects of the trust. CIT may even make enquiries from outsiders for this purpose. If he is satisfied about the genuineness of the activities of the trust, then he shall pass an order in writing registering the trust. It he is not so satisfied then, he shall pass an order refusing to register. A copy of every such order must be forwarded to the concerned applicant assessee.
(2.) No such order of refusal shall be passed unless on opportunity of being heard was given to the concerned applicant trust. Every such order of CIT, refusing to grant registration is appealable directly to ITAT u/s. 253. Every such order of CIT whether granting registration or refusing to register shall be passed within 6 months from the end of the month in which application was received from the trust.
(3.) If no such order is passed by CIT within 6 months, then the registration will be deemed to have been granted by CIT.
The Books of Accounts of the trust must be audited if income of the trust, including corpus donation exceeds Rs. 1,60,000/- (before claiming exemption u/s.11)
Ratan Deep Saxena
(Asstt Manager (Accounts & Finance))
(2998 Points)
Replied 24 April 2010
How to Form a Charitable Trust
A public charitable or religious institution can be formed either as a Trust or as a Society or as a Company registered u/s 25 of the Companies Act.
It generally takes the form of a trust when it is formed primarily by one or more persons.
To form a Society at least seven persons are required. Institutions engaged in promotion of art, culture, commerce etc. are often registered as non-profit companies.
These forms are enumerated as under :
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Charitable Trust settled by a settlor by a Trust Deed or under a Will.
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Charitable or religious institution / association can be formed as a society.
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Charitable institution can be formed by registering as a company u/s. 25 of the Companies Act, 1956, as non profit company (without addition to their name, the word “Limited” or “Private Limited”).
Registration under Income-tax Act
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Charitable or religious trusts, societies and companies claiming exemption under sections 11 and 12 of the Income-tax Act are required to obtain registration under the Act. Private/family trusts are neither allowed such exemption nor required to seek registration under the Income-tax Act. The detailed procedure is as under :
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Registration of Trust under Income-tax Act procedure for registration u/s. 12AA of I.T. Act.
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Application for registration in Form No.10A in duplicate.
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List of Name and Address of the Trustees
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Copy of Registration Certificate with Charity Commissioner or copy of application to him.
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Certified True Copy of the Trust Deed.
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PAN No. or Copy of application of the Trust.
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PAN of the trustees.
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Procedure for registration (Sec 12AA)
The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) of section 12A, shall –-
call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust orinstitution and may also make such inquiries as he may deem necessary in this behalf; and
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after satisfying himself about the objects of the trust or institution and the genuineness of its activities he –
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shall pass an order in writing registering the trust or institution;
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shall, if he is not so satisfied, pass an order in writing refusing to register the trust orinstitution,
and a copy of such order shall be sent to the applicant.
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Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard.
regards,
ratan
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