Statutory Compliance

There are no statutory provisions or guidelines available for the management of Trust. For the good management of a Trust, it is important that the Trust Deed should specify rules and regulations with regard to:

• Holding of Meetings
• Quorum of Meetings
• Chairman of Meetings
• Adopting a resolution
• Delegation of Functions
• Fixing of Accountability
• Sources of Income, including receipt of grants
• Modes of Investment
• Modes of application of funds, towards attainment of the objectives.
• Prohibition on use of funds for specified purposes
• Treatment of unutilized funds in the event of winding up
• Statutory audit and other legal formalities.
• Opening & Operation of Bank Accounts

Income Tax Provisions

Section 11 of the Act provides details of the modes of exemption from income tax to such public charitable trusts.

Section 12 mentions about exemptions for the contribution of income of the trust.

Voluntary contribution received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes

Section 13 of Income Tax Act gives the details related to forfeiture of exemption of income tax by public charitable trust.

All trusts are obligated to file annual reports. These returns of income should be filed with the relevant authorities having jurisdiction of the state where the trusts are registered. Income of the authors of trusts can be taxed as personal income under Sections 60 – 63 of the Income Tax Act, 1961 in cases where the trust deed has a provision for revocation of trust.

Section 80G provides details of the privileges available to the donors of public charitable trusts. Under this section, an individual donor is granted specific deduction if donations are made to such kind of public charitable trusts. To be able to provide this benefit to its donors, a public charitable trust is required to obtain a valid certificate. For obtaining this certificate, a trust is required to give application with form 10G along with the trust deed to the income tax office. The primary prerequisite to obtaining this certificate to provide benefit to the donors is that the income gained from the property of the trust should only be used in charitable purposes.

FCRA Compliance and other compliances:

FCRA Registration is compulsory for receiving the foreign funds.

Labour and other relevant laws are applicable as per the applicability of the same.

Filing of returns.

Changes in the governing councils/BOT s to inform properly and get the consent from MHA.

Maintenance of separate bank account exclusively for foreign contributions.

Not to mix foreign contributions and local contributions.