"According to Indian Trust Act, a trust may be created as Public Charitable Trust & Religious Trust. A Charitable Trust is one which has been created for the benefit of the public or of mankind. Charitable Trust may be created by a person who is of sound mind and no a minor. Any person who holds the property so dedicated shall hold it under trust and shall execute the purposes specified by the settler. The trust should get itself registered U/s 12A with the Commissioner of Income-tax within the specified time limit after the trust created. A trust is an agreement between people (called trustees) to manage property over which they have control either to benefit other people (called beneficiaries) or for charitable purposes. A group of trustees may be incorporated as a board under the Charitable Trusts Act 1957 if the objects are charitable. The CA Expert of S K Nagda & Company, in Udaipur, Rajasthan has so far created various types of trust for the clients.
The various types of trust are
- Testamentary trust (mortis cause)– Testamentary trusts are the most common trusts in use. They are especially suited to the protection of interest of minors and other dependants who are not able to look after their own affairs. These types of trusts come into being only after the death of the testator.
- Discretionary trust Payment of income and/or capital is subject to the discretion of the trustees and all non-allocated income is taxable in the hands of the trust. This type of trust may thus be utilised to save on income tax by splitting incomes.
- Vested trust The income and capital beneficiaries are already determined and described. The income is taxable in the hands of the income beneficiary, which could also be the capital beneficiary. The capital beneficiary thus gets immediate property rights, subject to the terms of the will or trust act.
- Living trust (Inter Vivos) Living trusts are ideal for keeping growth assets out of your estate and are thus a superb medium to limit estate duty and to protect assets from generation to generation. A living or inter vivos trust comes into being during the lifetime of the Donor or founder with the signing and registration of a trust. For guidance for creation of trust you may please contact our trust expert consultant in Udaipur, Rajasthan India and get the best solution.