Section 2(15) of the Income Tax Act which is applicable uniformly throughout the Republic of India - defines 'charitable purpose' to include 'relief of the poor, education, medical relief and the advancement of any other object of general public utility'. A purpose that relates totally to worship is not considered as charitable. Therefore, in ascertaining whether a reason is private or public, one has to see if the class to be benefited, or from which the beneficiaries are to be selected, constitute a substantial body of the public.
Whether a trust, section-25 company or society, the Income Tax Act gives all categories equal treatment, in terms of exempting their income and granting 80G certificates, whereby donors to non-profit organizations may claim a repayment against donations made.
Registration of a Non -Profit organizations in India :
- Section-25 Company
Additional Licensing/ Registration
A public charitable trust is habitually floated when there is property involved, especially in terms of land and building. Legislation: Different states in India have dissimilar Trusts Acts in force, that govern the trusts in the state, in the absence of a Trusts Act in any particular state or territory the general principles of the Indian Trusts Act 1882 are applied.
Main Instrument: The main instrument of any public benevolent trust is the trust deed, wherein the aims, objects and mode of management should be enshrined. In every trust deed, the maximum and minimum number of trustees has to be specified. The trust deed should clearly spell out the objects and aims of the trust, how the trust should be managed, how other trustees may be appointed or removed, etc. The trust deed should be signed by both the trustees and settlers in the presence of two witnesses. The trust deed should be executed on non-judicial stamp paper and the value of which would depend on the valuation of the trust property.