A Trust is a kind of arrangement that originates from the settlement between the Settlor/Author (owner of the property) and the Trustee (the transferee) for the beneficial interest of a third person called Beneficiary. In this arrangement, the Author of the trust handover the administration of trust property to the Trustee for the benefit of a third person called Beneficiary. 

In India, we classify trusts into two broad categories: 

1. Private Trust–Where trust is created for the benefit of specified persons or class of persons. 
2. Public Trust –Where trust is created for the general public and not limited to a selective group of persons. Public trusts are generally charitable in nature. 

Registration Requirement 

1. Trust Deed Registration
2. PAN
3. TAN
4. FCRA Registration – For accepting foreign contributions. 
5. RBI Approval – In case the beneficiary is a non-resident. 
6. GST Registration – In case annual turnover exceeds the prescribed limit of Rs. 40 Lakhs. 

Compliance Requirements

1. Audit of Accounts

If the income of the trust exceeds the threshold limits given under the Income Tax Act, 1961. 

2. Filing of Income Tax Return

The annual return of income in form ITR-7 is required to be filed every year. 

3. Reporting of Foreign Contributions 

Every Trust which receives foreign contributions needs to submit a report, duly certified by a Chartered Accountant and accompanied by an Income and Expenditure Statement, Receipts and Payments Account, Balance Sheet and annual account statement of separate account maintained to receive foreign contribution within 9 months of the closure of the financial year, to the Secretary, Ministry of Home Affairs, Government of India, New Delhi. A ‘Nil’ Report needs to be submitted if no such contribution is received during the last financial year.

4. Filing of TDS return and issuance of TDS certificates 

Where any Private Trust is deducting tax at source for payment of salaries to the staff or employees (kept for managing the Trust Property), it needs to furnish certificates of TDS to the persons on whose behalf TDS was being collected. It should be done within 1 month from the date of closure of the financial year. Apart from this, quarterly TDS returns are also required to be filed. 

5. Publication of accounts in newspaper

Where annual income or receipts of the Trust (generated from the Trust Property) exceeds Rs. 1,00,00,000 (INR One Crore).

6. Filing of GST Returns 

If trust is having GSTIN, then it is required to furnish GST returns monthly or quarterly (as may be applicable).