Creation, registration, administration and taxation of private trusts in succession planning

A Trust is an efficient tool for estate planning and managing property, and ensuring the smooth transfer of wealth from one generation to another. A Trust is a legal arrangement where one or more
persons (settlor/author) transfers property, movable (cash, shares, jewellery and other valuable items) or immovable, to another person called trustee, to hold and manage the property, for the benefit of a
third party (beneficiary). There are three main parties to a Trust: (i) settlor(s), (ii) trustee(s), and (iii) beneficiary(ies).

Depending on the particular purpose, proposed beneficiary(ies) and tax considerations, the Trusts in India are broadly categorised into Public Trust and Private Trust

1. What is a Public Trust?
   A Trust created for charitable, educational, social welfare, or religious purposes etc. for the benefit of the public or a section of it. Depending on the purpose of the Public Trust, it is governed by the
   Charitable and Religious Trusts Act, 1920 or the Religious Endowments Act, 1863 or specific State legislations. Registered Charitable and Religious Trusts have tax benefits/exemptions under taxation
   laws in India. Public Trusts fall outside the purview of the Indian Trusts Act, 1882.
   
   
2. What is a Private Trust?
   A Trust created for the benefit of specific, ascertained beneficiaries, typically family members. It is governed by the Indian Trusts Act, 1882 (the “Act”).

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This publication is intended for general information only and does not constitute legal advice. The position stated is as at July 2026. Readers should seek specific advice before acting on any matter discussed.
For assistance with the settlement, drafting or registration of a Trust, or with any other estate planning matter, please write to us at [email protected].