Sri JanaJagarana Trust is registered as Sri JanaJagarana Trust, a not-for-profit organization u/s 8 of The Indian Trusts Act, 1882. (Reg. No. 120/1977-78, dated. January 4, 1978), with the RoC, Mysuru, Karnataka.
Sri JanaJagarana Trust registered u/s 12A of the Income Tax Act, 1961, and with the Director of Income Tax (Unique Registration Number: AAATS7970DE20215)
Sri JanaJagarana Trust is registered u/s 80G of the Income Tax Act, 1961, and with the Director of Income Tax (Exemptions) u/s 80G, valid until 31/3/2026 (Unique Registration Number: AAATS7970DF20213)
The Indian Trusts Act, 1882 provides the legal framework for the establishment and operation of trusts in India. For your organization, Sri JanaJagarana Trust, and its website www.janajagarana.org, the following key legal principles and obligations under the Indian Trusts Act, 1882 are relevant:
Creation of Trust (Section 5):
A trust must be created with a lawful purpose and must not be for any unlawful or fraudulent activity. Sri JanaJagarana Trust is established with a lawful purpose, promoting education, healthcare, and social welfare.
Trustee Duties and Responsibilities (Sections 11-22):
Fiduciary Duty: The trustees are bound to act in good faith, with loyalty, and in the best interests of the beneficiaries.
Execution of Trust: The trustees must execute the trust in accordance with the terms of the trust deed and for the benefit of the beneficiaries.
Impartiality: Trustees must act impartially towards all beneficiaries and ensure equal treatment in accordance with the trust’s objectives.
Property Management: Trustees must carefully manage and administer the trust property, including donations and assets, ensuring they are used only for the intended purposes.
Trust Property (Section 10):
The trust property must be held and applied solely for the purposes stated in the trust deed, such as education, healthcare, environmental protection, and self-help initiatives in the case of Sri JanaJagarana Trust.
Trustee’s Power to Sell or Exchange Property (Sections 31-34):
Trustees have the power to sell, mortgage, or lease trust property, but such transactions must be for the benefit of the trust, and in line with the objectives of Sri JanaJagarana Trust.
Duties of Beneficiaries (Sections 51-66):
Beneficiaries, which in the case of Sri JanaJagarana Trust may include the individuals or communities benefiting from its programs, are entitled to proper information about how trust funds are being used and must receive the benefits as outlined in the trust deed.
Accounts and Record-Keeping (Section 32):
Sri JanaJagarana Trust is required to maintain proper books of accounts, regularly audited, to ensure transparency and accountability regarding donations and expenditures.
Trustee Liability (Sections 23-30):
Trustees are personally liable for any breach of trust, such as mismanagement of funds, failing to act in accordance with the trust deed, or committing any act that causes harm to the trust or its beneficiaries.
Alteration of Trust (Section 77):
A trust may be altered, revoked, or modified only in specific circumstances, such as by court order or if such powers are granted within the trust deed.
Extinction of Trust (Sections 81-85):
A trust can come to an end if its purpose becomes impossible, is fulfilled, or if it becomes unlawful. However, any remaining assets must be distributed for charitable purposes as per the Indian Trusts Act, 1882.
Court Supervision (Section 92 of the Civil Procedure Code, 1908):
The courts have the power to supervise trusts, particularly charitable trusts. In the event of any misuse or failure to comply with trust duties, beneficiaries, donors, or concerned parties may approach the courts for intervention.
Charitable Trusts (Public Trusts):
Although the Indian Trusts Act, 1882 is primarily concerned with private trusts, public or charitable trusts like Sri JanaJagarana Trust are also governed by this framework, along with applicable local laws or state-specific legislation (such as the Karnataka Public Trusts Act) that regulates charitable activities.
Tax Compliance:
As a charitable organization, Sri JanaJagarana Trust may also be governed by tax regulations, particularly those concerning Section 12A and Section 80G of the Income Tax Act, which provide tax exemptions and benefits for donors.
These provisions of the Income Tax Act provide significant tax benefits to charitable organizations and serve as an incentive for donors to contribute to charitable causes. They are essential for non-profit organizations in India, including Sri JanaJagarana Trust, to receive tax exemptions and encourage public donations.
Purpose of PAN:
The Permanent Account Number (PAN) is a ten-digit alphanumeric identifier issued by the Income Tax Department of India. It is essential for all entities, including charitable trusts like Sri JanaJagarana Trust, to have a PAN for conducting financial transactions and fulfilling tax-related obligations.
The PAN serves as an important document when applying for grants, loans, or any financial aid from government agencies or private entities.
Legal Requirement:
Sri JanaJagarana Trust must have a PAN for filing income tax returns, receiving donations, applying for tax exemptions (under Section 12A and Section 80G), and maintaining compliance with Indian tax laws.
PAN serves as a unique identifier for all financial transactions, ensuring that all income generated by the Trust is accounted for and reported to the Income Tax Department.
Financial Transactions:
PAN is necessary for opening and operating bank accounts in the name of the Trust.
Any high-value financial transactions (such as receiving large donations, selling or purchasing assets, etc.) must be accompanied by the PAN to ensure legal compliance.
The PAN must be quoted on invoices, receipts, and financial documents related to the Trust’s operations.
Donations:
PAN is crucial for tracking donations and ensuring proper tax documentation. Donors may need the Trust’s PAN to claim tax deductions under Section 80G, as it is required for large or corporate donations.
PAN helps the Income Tax Department to trace the funds received by the Trust, ensuring they are used for charitable purposes.
Tax Filing and Compliance:
Sri JanaJagarana Trust must quote its PAN while filing Income Tax Returns (ITR) and other financial statements with the Income Tax Department.
It ensures that the Trust’s income, donations, and grants are properly recorded, and any applicable tax exemptions under Section 12A are accurately applied.
All audits and assessments conducted by the tax authorities will be linked to the Trust’s PAN.
Transparency and Accountability:
PAN helps ensure transparency in financial dealings, making it easier for both the government and the public to verify the Trust’s financial activities.
Filing Income Tax Returns:
Sri JanaJagarana Trust must use its PAN while filing income tax returns each year to report its financial activities and income, including donations and grants. This is crucial for maintaining the Trust’s tax-exempt status under Section 12A.
Issuing Receipts to Donors:
For donations, especially from corporations or high-net-worth individuals, the Trust’s PAN must be included on receipts. This allows donors to claim tax deductions under Section 80G.
The Trust’s PAN must also be shared with government agencies or foundations offering grants.
Audits and Financial Records:
The PAN is required during any financial audit or when submitting financial statements to the tax authorities. Proper maintenance of financial records, linked to the Trust’s PAN, ensures legal compliance and avoids penalties.
Purpose:
Section 12A of the Income Tax Act allows charitable organizations, like Sri JanaJagarana Trust, to claim exemptions on their income. This provision is essential for ensuring that all donations, grants, and income generated by the Trust through its charitable activities are not taxed by the government.
Eligibility:
To avail the benefits under Section 12A, Sri JanaJagarana Trust must be registered with the Income Tax Department. The registration certifies that the Trust is a genuine charitable entity engaging in activities such as education, healthcare, environmental protection, and social justice.
Benefits:
Once registered under Section 12A, Sri JanaJagarana Trust’s income from donations, grants, and other charitable operations is fully exempt from income tax.
The exemption applies to income received for charitable purposes, including donations, sponsorships, and other sources of income that support the Trust’s mission.
The Trust must ensure that all income is used solely for charitable purposes as specified in the deed, ensuring compliance with legal requirements to maintain the tax-exempt status.
Compliance:
The Trust must file annual income tax returns and submit audited financial statements to the Income Tax Department.
Sri JanaJagarana Trust should also maintain proper records of all donations and expenses to ensure compliance with Section 12A requirements and avoid penalties.
Sri JanaJagarana Trust must remain compliant with all legal and financial regulations outlined by the Income Tax Act to maintain its registration under Section 12A.
Annual audits and financial reports must be submitted to the Income Tax Department to show that the Trust’s income is used for its charitable purposes (education, healthcare, environmental initiatives, and social welfare).
Failure to comply with Section 12A regulations could result in the loss of the tax-exempt status, which would mean that the Trust’s income could be subject to tax, impacting its ability to allocate funds effectively for its programs.
Purpose:
Section 80G provides tax deductions for individuals and corporations donating to charitable organizations like Sri JanaJagarana Trust. This provision incentivizes donors by allowing them to claim a tax deduction on their taxable income, thus encouraging more philanthropic contributions.
Eligibility:
Sri JanaJagarana Trust must be registered under Section 80G to offer this tax deduction benefit to donors. This registration validates that the Trust operates as a charitable organization and complies with the relevant legal requirements.
Donors can claim a deduction of 50% or 100% of the donation amount, depending on the type of charity and government recognition, up to a prescribed limit of their gross income.
Benefits for Donors:
Individuals, corporations, and other entities contributing to Sri JanaJagarana Trust can claim tax deductions on their contributions. This encourages public support and enhances the Trust’s ability to raise funds.
The tax deduction incentivizes higher donations, as donors know that a portion of their contribution will reduce their tax liability, making their support for the Trust financially beneficial as well as charitable.
Certificate of Donation:
The receipt should include details such as the donor’s name, amount donated, PAN number, and the 80G registration number of the Trust.
After every donation, Sri JanaJagarana Trust must issue a receipt or certificate containing the details of the donation and the donor’s name. This certificate is necessary for the donor to claim their tax deduction under Section 80G.
Sri JanaJagarana Trust can offer donors the ability to claim tax deductions on their contributions. This provides an additional incentive for people and corporations to donate, thereby increasing the Trust’s fundraising capacity.
The Trust should prominently display its 80G certification on its website and promotional materials to ensure that potential donors are aware of the tax benefits they can receive by supporting the organization.
Maintaining accurate records and issuing prompt donation receipts are critical for the Trust to uphold the legal requirements for 80G and to facilitate donors in claiming their tax deductions.
Corporate Social Responsibility (CSR) is a legal mandate in India under the Companies Act, 2013, which requires certain companies to contribute a portion of their profits toward social causes. Sri JanaJagarana Trust can benefit from CSR funds by aligning its charitable activities with the CSR goals of these companies.
Key Features of CSR in India (Applicable to Trusts):
The Trust must ensure full transparency and accountability in the utilization of CSR funds by maintaining detailed reports and sharing these with the corporate donors to ensure compliance with CSR regulations.
CSR Requirements for Companies:
As per Section 135 of the Companies Act, 2013, companies with a net worth of ₹500 crore or more, a turnover of ₹1,000 crore or more, or a net profit of ₹5 crore or more, are required to spend at least 2% of their average net profits of the last three financial years on CSR activities.
CSR funds must be allocated to projects or activities that fall under the purview of the Schedule VII of the Companies Act, which includes areas such as education, healthcare, environmental sustainability, poverty eradication, and rural development.
Role of Sri JanaJagarana Trust in CSR:
Sri JanaJagarana Trust can collaborate with companies to help them fulfill their CSR obligations by implementing projects in education, health, nature conservation, women’s empowerment, and other relevant social causes.
The Trust serves as an implementing partner by taking up projects funded by companies under their CSR initiatives.
CSR Registration Form (CSR-1):
Trusts like Sri JanaJagarana Trust need to be registered with the Ministry of Corporate Affairs (MCA) by filing Form CSR-1 to be eligible to receive CSR funds from companies.
Filing CSR-1 is mandatory for charitable organizations that wish to receive CSR contributions. Once registered, the Trust will receive a unique CSR Registration Number, which enables companies to verify the Trust’s eligibility for receiving CSR funds.
Filing CSR-1:
The CSR-1 Form must be filed electronically with the Registrar of Companies (ROC), and it includes information about the Trust’s registration, PAN, and activities.
Sri JanaJagarana Trust must provide valid documentation, including its registration under the relevant acts (such as Income Tax Act Section 12A), to demonstrate that it is a legitimate organization engaged in charitable work.
The Ministry of Corporate Affairs will issue a certificate confirming that the Trust is registered and eligible to receive CSR funding.
CSR Reporting and Compliance:
Companies that partner with Shri Jana Jagarana Trust for their CSR initiatives are required to include details of their CSR spending in their annual reports, including the nature of the projects undertaken by the Trust.
Eligibility to Receive CSR Funds:
By registering through Form CSR-1, Sri JanaJagarana Trust becomes eligible to receive CSR funding from corporations looking to fulfill their statutory obligations. This enables the Trust to secure additional funding for its programs focused on education, healthcare, environment, and community development.
Collaboration with Corporates:
Sri JanaJagarana Trust can work as an implementing partner for CSR projects, leveraging its expertise in social work to execute projects funded by corporates. This helps in expanding the scope and impact of the Trust’s charitable initiatives.
Transparency and Accountability:
To maintain credibility and build long-term relationships with CSR contributors, the Trust must ensure proper utilization of funds. It should provide detailed reports on how the CSR funds are used, ensuring alignment with the agreed-upon objectives.
Compliance with Legal Obligations:
The Trust must adhere to all guidelines stipulated under the Companies Act, 2013 to ensure continued eligibility for CSR funding. This includes timely submission of reports, audits, and following all financial regulations to maintain good standing.
