Charitable Trust (India)
This document is a template for establishing a charitable trust to hold and manage property for specific philanthropic purposes. It outlines the transfer of assets, investment powers of trustees, and strict compliance with tax-exempt regulations to ensure contributions remain tax-deductible.
Charitable Trust
The purpose for creating this trust is to promote ________________________________
I, ___________, trustor, create a trust fund of the property listed in Schedule A attached and incorporated by this reference, which I have delivered today to ____________.
I hereby give, transfer, and deliver the property described in Schedule A to the trustees in trust for the purposes stated.
The name of this trust shall be the _____________.
Trustor and Trustee, hereby agree as follows:
TRANSFER OF CORPUS
Trustor hereby gives and transfers to trustees the property described in the attached schedule together with its income and profits and any other sums that may be transferred to trustees or their successors pursuant to the terms of this agreement, to hold in trust for the uses and purposes set forth in this agreement.
INVESTMENT AND APPLICATION OF TRUST FUND AND INCOME
The trustees shall hold the trust fund and, in their discretion, invest it or parts of it in securities in which trustees are permitted to invest under applicable laws. The trustees from time to time in their own discretion may invest the income to the charitable uses and purposes described above solely by means of contributions to any charitable corporation, trust, community chest, fund, or foundation which at the time of the contribution by the trustees is one of those organizations described in the IRS Code of the United States, contributions to which are deductible for income tax purposes.
Trustees shall make distributions at such times and in a manner as not to subject the trust to tax and shall not act in any self-dealing as described in Section 4941 of the Internal Revenue Code. Trustees shall not retain any excess business holdings as defined in Section 4943 of the Internal Revenue Code and shall not make any investments as defined in Section 4944 of the Internal Revenue Code nor make any taxable expenditure, which would subject the trust or corporate trustee to tax under Section 4945 of the Internal Revenue Code.
RESTRICTIONS ON USE OF TRUST FUND
The trust fund and the income of the trust fund shall be used only for the purposes described above and shall not be used to benefit or inure any private person or corporation, except for the corporate trustee. No part of this trust shall be used for political purposes.
ADDITIONAL GIFTS TO FUND
Anyone from time to time may contribute to the trust corpus money or property to the trust, subject to the approval of the trustees.
TRUSTEES ACTIONS
The trustees shall not be responsible for any error or decision which is absent of bad faith.
TRUSTEES COMPENSATION
The corporate trustee shall be reimbursed from time to time as decided by the trustor and be paid by the trust. All expenses incurred through the administration of the trust fund shall be paid by the Trustor. The individual trustees shall serve without compensation.
DECISIONS OF THE TRUST
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About this template
What is this template?
This is a formal deed of settlement used to create a legal trust entity in India. It contains specific sections for the 'Author of the Trust' to transfer a specific sum or property to a board of trustees and defines the 'objects' which must remain charitable or religious. It is not a society registration document or a Section 8 company's articles of association.
When should you use it?
Use this deed when you intend to vest property in trustees for long-term charitable purposes under the Indian Trusts Act. If you prefer a membership-based structure with a governing body, use a Society Memorandum of Association instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 2 | Objects of the Trust | Lists specific charitable purposes including establishing schools, providing medical relief, and supporting religious activities for public benefit. |
| 4 | Board of Trustees | Specifies that the board shall consist of between [minimum number] and [maximum number] of trustees to manage affairs. |
| 6 | Powers of Trustees | Grants the board authority to invest trust funds in movable or immovable properties and borrow money for trust objectives. |
| 3 | Trust Property and Funds | Confirms the initial settlement sum of [amount] and provides that all future donations or acquisitions form part of the trust estate. |
| 9 | Accounts and Audit | Requires trustees to maintain regular accounts of all receipts and expenditures and have them audited by a chartered accountant annually. |
| 12 | Irrevocability | Declares that the trust is irrevocable and no part of the fund shall ever revert to the Author of the Trust. |
Who it's for
- individuals in India establishing a public charitable or religious trust
- groups seeking to register a non-profit entity for tax-exempt status under Section 12A
- settlors donating property or funds for permanent community or educational use
How long it runs and how it's signed
Law it's drafted under
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