How to Start A New NGO of Your Own

How to Start a New NGO of your Own ?

NGO may be formed and registered as

- Trust
- Society
- Company

Formation as a Trust :

- What is trust ?

A trust is a convenient method whereby a limited number of persons may hold property on behalf of other persons, who may be a large group or individual persons or minors and they may include the persons which are not yet born.

Trust, which means “Faith”, “Vishvas” (as in hindi) detonates that one appoints somebody to hold any sum or property for the benefit of a third person.

The person who appoints somebody is called “Author/Settler” of the trust.
The person who is appointed is called “Trustee”.
The person for whose benefit the trustee is appointed is called “Beneficiary”.
The Author of the Trust can also be the Trustee.

- Conditions for Creation of Trust

- The settler has to give up ownership and all beneficial interest in the sum or property which he is putting into the trust.
- The property should be clearly described.
- The objects of trust should be clearly indicated.
- Formal deed or written instrument is not necessary but for all PRACTICAL purposes, there must be a written instrument called trust deed.
- The settler must be a person competent to contract.

- Where to go for Registration of a Trust

For public trust involving moveable or immovable property, registration is optional but always desirable. A registered trust deed has following advantages.

- It becomes an official document which carries support and force of law.
- Under the Income Tax Act of India, to claim exemption in case of public charitable trust, it must be duly registered.
- It serves all the practical purposes in various government offices and departments.

- Registration of Trust

Registration of a trust is required at two levels.

- Registration under State Act under Indian Trusts Act, 1882.

As discussed earlier, registration under state act is desirable to give the created trust a legal shape for all practical purposes. It involves following process.

- Decide the name, address, objects, settlers, trustees and beneficiaries and property of the trust.
- Draft trust deed on stamp paper of requisite value.
- Register that trust deed with local registrar office which involves
- Trust deed on stamp paper and a zerox copy of the same.
- Passport size photographs of settler and trustees.
- Signature on all the pages of trust deed of the settler and trustees with two witnesses.
- Submit both original and photocopy to the registrar.
- Registrar will keep the photocopy and return the original after affixing his official seal and signature.

- Registration under Income Tax Act (Applicable only for Public Charitable Trusts)

Registration of charitable trusts under Indian Income Tax Act, 1961 involves two way process. It starts with application for Permanent Account Number (PAN) of the trust.

- Registration under section 12AA of Income Tax Act.

- Application in form 10A to be submitted before the commissioner of income tax before the expiry of one year from the date of creation of trust.
- Application must be accompanies by certified copies of trust deed and annual accounts of the trust.
- If it is a new trust, then annual accounts need not be submitted.
- Registration will be granted on recommendation of assessing officer of the area of the address of trust.

- Registration under Section 80G of Income Tax

- Application in form 10G to be filed with commissioner.
- Other process is same as above.


Thus from income tax departments two separate certificates is to be received on registration of trust. One is certificate u/s 12AA which will entitle the trust exemption from income tax on any income earned by the trust. Second is certificate u/s 80G which will entitle the donor who donates any sum to the trust deduction u/s 80G of the Income Tax act.