Since Covid-19 pandemic, around half a million trusts added to PAN data

Nearly 500,000 additional permanent account number (PAN) allotments have been made to trusts between March 2019 and March 2025.

 

Allotments to trusts rose from 847,834 in 2019 to 1.3 million as of March 2025, show statistics from the Income Tax Department, released earlier in April.

 

This represents a 56 per cent rise. Trust registration happens at both national and state levels. This means there is sometimes limited centralised data on trust formation which is reported upon, unlike say, the number of companies formed. The PAN allotments provide some indication of activity in the segment. Higher requirements on tax compliance, spending on corporate social responsibility (CSR), and wealthy individuals and families increasingly setting up trusts for succession and tax planning may have contributed to more trusts showing up in the PAN card data, suggest experts.

 

“Trusts would include public charitable as well as private trusts. As far as charitable trusts are concerned…(those) obtaining PAN cards have increased in the last decade or so due to overall increase in social spending in India leading to new trusts being registered. The key driver could be the introduction of mandatory CSR legislation and registration requirements for eligible trusts under CSR legislation for implementing the CSR project. As far as private trusts are considered, there appears to be a rising trend due to increased succession planning and wealth management by business families in India,” said Pankaj Bagri, partner, Deloitte India.

 

“Everyday we are seeing enquiries,” said Neha Pathak, managing partner and head of trust and estate planning, Motilal Oswal Wealth. Requ-ests on setting up trusts are up 100 per cent over the pre-pandemic period, according to Pathak. 

 

Trust formation as a way of managing assets and succession is becoming popular with startup founders and mid-sized companies in addition to older industrial families. 

 

There has been an influx of funds into sectors including pharmaceuticals, defence, and manufacturing. Wealth creation has resulted in increased attention to succession planning.

 

“People are concerned about marital disputes and disputes within members of the family,” said Pathak. In addition, trusts can help limit the effects of any inheritance tax or estate duty, which can result in heavy taxation as wealth changes hands from one generation to the next. The trust structure also allows easier transmission because it eliminates onerous requirements such as the need for a probate petition to certify the authenticity of a will before it can be given effect.

 

India now ranks third in the world in the number of billionaires (284), Business Standard had reported earlier in March, with more than a dozen added over the past year, according to the Hurun Global Rich List 2025.

 

A 2022 Credit Suisse report had estimated that India had 796,000 dollar millionaires in 2021, a number that was expected to more than double by 2026.

 

Tighter compliance for trusts likely played a role in driving higher numbers, said Raju Kumar, tax partner, EY India.

 

While older charities are less likely to use trusts now because of tighter foreign-funding rules, wealthy individuals have also contributed to new trust formation. Numbers showing up in tax data may head higher, according to Kumar.

 

“The trend is expected to continue, driven by mandatory PAN requirements,” he said.