How Is A Trust Created
How Is A Trust Created
How Is A Trust Created
1. Private Trust:
A trust is called a Private Trust if it
is for the benefit of one or more
persons, or within a specified period,
which may be available. Financially
Trusted Trustees are governed by the
Indian trust Act 1882. Private Trust may
be established between Inter Vivos or
will.
TYPES/KINDS OF TRUSTS
2. Public Trust
A trust is called as Public Trust when it is constituted
wholly or mainly for the benefit of Public at large, in
other words beneficiaries in the Public trust constitute a
body which is incapable of ascertainment. The Public
trusts are essentially charitable or religious trusts and
are governed by the general Law. The provisions of Indian
Trusts Act do not apply on Public Trusts. Like the private
trusts, public trusts may be created by inter vivos or a
will. The Indian Trusts Act does not apply to public
trusts which can be created by general law.
TYPES/KINDS OF TRUSTS
3. Public-cum-Private Trusts
Some trusts may be classified as Public cum Private
Trusts, whose portion of the profits maybe used for public
purposes and a portion may go to a private person or
individuals. Such trusts shall be eligible for exemption
in respect of the portion of income earned by private
individuals or persons as private trusts and shall be
eligible for exemption in respect of the portion of income
received for public purposes in compliance with section
11, given that such trusts have been created before the
Income Tax Act of 1961, i.e. before 1-4-1962. Public-cum-
private trusts produced on or after 1-4-1963 is not
eligible for exemption U/S 11
DIFFERENCE BETWEEN PRIVATE & PUBLIC
TRUST