yashsr (CA) 11 September 2011
1) Is audit compulsory for a trust or is it only required if we're claiming exemption of its income?
2) Can a chartiable trust ever be a private trust? As far as I know, chartiable trust is always a public chartiable trust. Is this correct?
3) What are the documents that a trust has to maintain regularly apart from the Trust Deed which is made at its inception? Also, does Trust Deed have to be registered with some institution just like Partnership Deed is registered with the Registrar of Firms?
Rajagopalakrishnan R (PARTNER) 13 September 2011
1. It depends on the state where the trust is formed. In some states trusts are subject to audit as per the local trusts act/charities act. Please be guided accordingly
2. It is not necessary that a private trust can never be a charitable trust. A private trust where the benefits from the trust property is to be used for charitable purposes only can be a charitable trust.
3. All trusts have to be registered in order to be binding on the trustees. an unregistered trust is also valid but it does not bind the trustee to the trust obligations. Trusts are normally registered with the Sub registrar having jurisdiction over the place where the trust is created