How to form a tax efficient Charitable Trust

First step is formation and registration of a Charitable trust. The trust can start its activity after completion of first step. Second step is registration u/s 12A & recognition u/s 80G of the Income Tax Act, 1961. This enables the trust to pay less tax and donors to get tax exemption. To get this recognition it is important for the trust to demonstrate that it is actually involved in charitable activities and not dormant. Final (optional) step - the Trust can apply for registration under FCRA after 3 years of registration. The trust needs to be audited every year and trust objective compliant transactions need to be logged in systematically and periodically.