Resource guide

Duties and Responsibilities of a Trustee in India

Updated January 2025 · For temple trustees, charitable trust committees and NGO boards in India

Who is a trustee under Indian law?

A trustee is a person or group of persons appointed to manage a trust's assets and affairs in accordance with the trust deed and applicable law. Under the Indian Trusts Act, 1882, trustees are fiduciaries — meaning they hold the trust property not for their own benefit, but for the benefit of the beneficiaries (the public, in case of a public charitable trust). Being appointed as a trustee is a significant legal responsibility, not merely an honorary title.

Legal duties of a trustee under the Indian Trusts Act

The Indian Trusts Act, 1882 sets out specific duties for every trustee. Failure to comply can result in personal liability, removal from the trust, or legal action.

Duty of care

A trustee must manage trust property with the same care a prudent person would apply to their own property. Negligent management is a breach of duty.

Duty of loyalty

A trustee must act solely in the interests of the trust and its beneficiaries — not for personal gain. Conflicts of interest must be declared and avoided.

Duty to keep accounts

Trustees must maintain proper books of accounts, issue receipts for all donations received and make accounts available for inspection.

Duty not to delegate

Core trustee decisions cannot be delegated to non-trustees. Each trustee is personally responsible for decisions made in their name.

Duty to act uniformly

All trustees must act together. A decision made by one trustee without the knowledge of others may be invalid and expose that trustee to personal liability.

Duty to act promptly

Trustees must not allow the trust's affairs to stagnate. Delayed filing, missed audits and unpaid taxes are trustee failures, not clerical errors.

Financial responsibilities of a temple or charitable trust trustee

Financial management is at the heart of trustee responsibility. These are the specific financial duties every trustee must fulfil:

1. Maintain a complete record of all donations received with receipts
2. Issue 80G-compliant receipts for all eligible donations
3. Record all expenses with vouchers and supporting documentation
4. Maintain separate bank accounts for the trust — never mix with personal funds
5. File annual income tax returns (ITR-7) for the trust
6. Submit Form 10BD (annual donor statement) by 31st May each year
7. Get annual accounts audited by a Chartered Accountant
8. Maintain records for a minimum of 6 years

When can a trustee be held personally liable?

Personal liability is real — not theoretical

Under Indian law, trustees can be held personally liable for trust losses caused by their negligence, mismanagement or breach of duty. This means personal assets — not just trust assets — can be at risk.

Donations received without proper receipts, leading to income tax demand on the trust
Expenses paid without vouchers, flagged during audit as unexplained payments
Trust funds mixed with personal bank accounts
Annual returns not filed, leading to penalties assessed against trustees personally

How trustee management software reduces your liability

Every donation receipted

Sanstha ERP issues 80G receipts for every donation automatically. No donation goes unrecorded. No receipt is missing.

Every expense vouchered

Every payment generates a printed voucher with payee, amount, category and authorisation. Your audit trail is always complete.

Reports ready when needed

Annual income-expense statements, trustee contribution reports and donor-wise summaries are generated in one click — no scrambling before audit.

Trustee responsibilities — FAQ

Yes. Under the Indian Trusts Act, a trustee can be removed by a court if they are found to have mismanaged trust funds, failed to maintain proper accounts or acted in breach of their fiduciary duty. The Charity Commissioner in most states also has powers to remove errant trustees of public charitable trusts. Maintaining proper financial records is the best protection against removal.

Yes. Under Section 12A/12AB of the Income Tax Act, registered charitable trusts must get their accounts audited by a Chartered Accountant and file the audit report (Form 10B or 10BB) along with their ITR-7 return. Failure to file can result in loss of tax exemption and penalties.

Form 10BD is an annual statement of donations received by a charitable institution that must be filed with the Income Tax department by 31st May each year. It lists all donations received during the financial year along with donor PAN details. Sanstha ERP compiles this data automatically from your donation records.

Yes. Beneficiaries of a public charitable trust — in some interpretations, members of the public — can approach the court if trustees are found to be mismanaging trust funds or acting contrary to the trust deed. The Charity Commissioner can also initiate action based on complaints. Proper financial management and record-keeping is a trustee's primary protection.

Yes. Sanstha ERP helps trustees fulfil their financial management obligations by: generating 80G-compliant receipts for all donations, maintaining a complete expense record with vouchers, tracking individual trustee contributions, generating annual income-expense statements and providing the donor data needed for Form 10BD. It significantly reduces the risk of audit failure and personal liability.

Protect yourself as a trustee

Sanstha ERP gives you the records, receipts and reports you need to meet your legal obligations.

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