Charitable trust and activities abroad

Daivat (Querist) 26 June 2017 This query is : Resolved
Can a Charitable Trust organisation in Rajkot, Gujarat, India carry out charitable activities abroad as well? I think this is OK but can it establish a charitable trust in a country outside of India (subject to the local laws permitting)? I suppose this would be done so that the Indian Charitable Trust itself and not the individuals is a founding member or trustee of the foreign charitable organisation. Does Gujarat State law or BPTA allow this?
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Sankaranarayanan (Expert) 28 June 2017
It seems academic query, if not, what is your real query point out

Rajendra K Goyal (Expert) 29 June 2017
Academic query.

State material facts of the problem if any.

How are you concerned / related with the query?

Looks like examination question.

Daivat (Querist) 29 June 2017
This is not an academic query at all. The charitable trust exists in Rajkot, Gujarat and runs temples and schools. With many of the beneficiaries having grown up and living as NRIs in the UK and USA and Australia, we want to establish similar charitable organisations there. The question is whether there are any legal or otherwise restrictions on the Indian Charitable Trust being a Founding Member of the new charitable organisations being established abroad? The local laws in those countries do allow this but I do not know what Indian Law and Charity Rules and BPTA might allow or restrict. Thank You

T. Kalaiselvan, Advocate (Expert) 01 July 2017
Under the Indian trust law, a trust is a contract / arrangement. As the name suggests, it is a contract of faith / trust which the settlor reposes in the trustee for the benefit of the beneficiary. Trust is not a person.However many times, trust is referred to as a person – not only in general parlance but also under some laws.
A trustee is the legal owner, has powers to deal with the income and the assets. Generally he cannot enjoy the income (except fees if any).

The beneficial owner has right to enjoy the income and the assets distributed by the trustee. Generally the beneficiary cannot deal with the assets and income.

For an organisation to be termed as charity it requires Income tax clearances under 12 A Clause of Income Tax Act. Section 2(15) of the Income Tax Act defines ‘charitable purpose’ to include ‘relief of the poor, education, medical relief and the advancement of any other object of general public utility’. A purpose that relates exclusively to religious teaching or worship is not considered as charitable.

According to section 8(1)(a), (b) and (c) of the Indian Companies Act, 2013, a section-8 company can be established ‘for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object’, provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members.