Charitable and Religious Trusts and Institutions are entities established with the primary objective of promoting charitable or religious causes. These trusts operate for the benefit of the public or a significant section of society and are not driven by profit motives.
Charitable purposes may include relief of the poor, education, medical relief, advancement of any other object of general public utility, environmental protection, and preservation of art and culture.
Religious trusts, on the other hand, are set up to promote or propagate a particular religion or religious belief and may involve the upkeep of temples, mosques, churches, and other religious places, or supporting religious rituals and ceremonies.
These entities are typically registered under relevant laws such as:
The Indian Trusts Act, 1882 (for private trusts)
The Societies Registration Act, 1860
The Charitable and Religious Trusts Act, 1920
Or under state-specific Public Trusts Acts (e.g., Maharashtra Public Trusts Act)
To enjoy income tax exemptions under the Income Tax Act, 1961, they must register under Sections 12AB and 80G, subject to compliance with regulatory conditions such as annual filings, utilization of income for charitable purposes, and maintaining proper accounts.
These organizations play a vital role in filling the gap between government services and social needs, often acting as partners in nation-building and humanitarian efforts.
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Charitable and Religious Trusts and Institutions in India play a crucial role in societal development and spiritual well-being. They are legal entities formed to carry out philanthropic, educational, medical, cultural, or religious activities. These institutions serve as vehicles for individuals and organizations to contribute to the greater good of society.
Charitable Trusts These are established for purposes such as:
Relief of the poor
Education
Medical relief
Preservation of environment or monuments
Advancement of any other object of general public utility
Religious Trusts These are created for:
Promotion or maintenance of religious activities
Managing temples, mosques, churches, or other places of worship
Conducting rituals, ceremonies, or festivals
Some trusts may serve both charitable and religious purposes, provided the activities fall within the permissible legal framework.
Charitable and Religious Trusts in India may be registered under various laws, depending on their nature and structure:
Indian Trusts Act, 1882 (mostly for private trusts)
Societies Registration Act, 1860
Charitable and Religious Trusts Act, 1920
State-specific Public Trusts Acts (e.g., Maharashtra Public Trusts Act, 1950)
To avail income tax exemptions and donor benefits, such trusts must comply with certain provisions under the Income Tax Act, 1961:
Registration under Section 12AB
Mandatory for claiming exemption on income
Subject to periodic renewal and compliance
Approval under Section 80G
Enables donors to claim deduction on donations
Requires separate application and adherence to conditions
Section 10(23C)
Available for certain institutions like universities, hospitals, etc.
Note: Non-compliance with filing requirements or misapplication of funds can lead to cancellation of registration and withdrawal of tax benefits.
Maintenance of regular books of account
Annual filing of income tax returns
Filing of Form 10B or 10BB (Audit Report) for income above specified thresholds
Filing of Form 10 for accumulation of income under Section 11(2)
Filing of Statement of Donations in Form 10BD and issuing Form 10BE to donors
NRIs often contribute to charitable and religious causes in India. Donations to 80G-approved trusts can provide tax benefits in India, though tax benefits may not apply in the NRI’s country of residence unless under a Double Taxation Avoidance Agreement (DTAA) or mutual recognition.
Before contributing, NRIs should:
Verify the trust’s registration under 12AB and 80G
Check FCRA (Foreign Contribution Regulation Act) registration, if remitting from abroad
Obtain proper receipts and documentation for tax purposes
Charitable and Religious Trusts and Institutions are essential pillars of civil society, offering a structured and accountable means to give back. With proper legal backing and regulatory compliance, they ensure transparency and trust—making them attractive to both domestic and overseas donors.
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