Trusts and charitable organizations are established to promote social, religious, educational, or charitable objectives. Under the Income Tax Act, 1961, such entities can claim tax exemptions if they are registered under Section 12A/12AA and comply with statutory provisions. Income received by the trust from donations, property, or investments, if used for charitable purposes, is generally exempt from tax. Trusts must maintain detailed accounts, prepare audited financial statements, and file Income Tax Returns using forms like ITR-7 annually to report income, expenditures, and claim exemptions. Contributions eligible for exemption under Section 80G allow donors to claim deductions while making donations. Compliance with statutory requirements ensures transparency, maintains public trust, and prevents penalties or scrutiny from tax authorities. Proper record-keeping, timely filing, and adherence to governing regulations are essential for sustaining the trust’s legal and tax-exempt status. Professional guidance is often recommended to manage accounts, calculate exempt income, file returns, and maintain compliance with the Income Tax Department, ensuring smooth operations and credibility in charitable activities.