Trust

If they are going to do it regularly and give it a proper form then they can do it otherwise there is no need to form a trust for such an amount.

Because if you form a trust and want 12A you need to have proper object, place of trust etc and then you register as trust and apply to CIT for 12A but it includes lot of expense.

You can even just form an AOP and collect donations and take deduction of such donation.

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Thank you

- To do it in an organised manner, I advise you to create trust and apply for registration u/s 12A and 80G.If you are planning to collect it from outsiders and do it regularly then you should form the trust. Maximum limit of cash for donation is 2k.

- In the manner as you have mentioned, benefit of donation may be claimed by an individual in ITR  after obtaining donation receipt from the orphanage. Orphanage should have been registered under 80G. 

Hello,

Yes, if you are going to do it every year and would also collect donations from outsiders then you should for a trust.

Trusts having a 12A certificate are entitled to 80G certification. Donors would be eligible for a tax deduction under Section 80G only when the donation is in favor of Trust certified with 80G.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Dear Sir,

Hope you are doing well !!

If they have decided to do it ever year and start collecting donations from outsiders too, the they should get registered as trust and get 12A.

It is important to note that when registration is granted under section 12A, it does not mean that section 80G approval is to be given i.e. registration under section 12A will not provide automatic approval under section 80G. Section 80G applies only to charitable trusts or institution (specified u/s 80G). It does not apply to religious trust or institutions.

Hi

Yes,since it is decided to carry it on every year,it is advisable to form a trust and get 12A certificate.

Hope it helps

Yes, they should get it registered as trust. Otherwise, it may create issue.

Practically, it is ok for the year when amount was 2 lacs but going forward they should register it as a trust.