hi Siddarth ..............
Answer of ur 1st part Question - as per indian Trust Law every person capable of holding property such as a human being, corporation, Company and even a state can be made beneficiary of a trust. An unborn person can also be made beneficiary.
However, a proposed beneficiary is not bound by the desires of the person creating the trust. Such a proposed beneficiary can renounce his interest under the trust by either making a disclaimer addressed to the trustee or by setting up a claim inconsistent with the trust
Answer of ur 2nd part Question - This is one of the most common questions asked by people in India who want to setup a public charitable trust. Running a trust may not be an easy job and it may require a trustee to invest significant amount of time and energy. Most lawyers and CAs would straightway tell you that it is not allowed for a trustee to take any benefits from the trust funds. This however depends on what is a “benefit”.
The first thing you must understand is that trusts are of two types: private and public charitable trusts.
Indian Trusts Act 1882 covers only private trusts and it specifically excludes public trusts from its ambit. Most people think that Indian Trusts Act 1882 also applies to public charitable trusts as well. But that is wrong. Public charitable trusts are governed by Bombay Public Trusts Act 1950.
Both Bombay Public Trusts Act 1950 and section 13 of Income Tax Act state that the trustees can draw a “reasonable” compensation from the trust fund for the services they provide to the trust. Please note that being a trustee itself is not considered a service.
If a trustee is also a Chartered Accountant –and if s/he is managing/auditing trusts accounts, s/he is eligible for reasonable compensation.
If one or more trustees are taking unreasonable benefits from trust fund –the Income Tax department may refuse/revoke the allotment of tax exemptions under section 12A and 80G. If that happens all the earnings of the trust shall become taxable.
I hope you are ok with this ............. if any thing further please let me know.
Thanks
Shankar