According to Lumbini Development Trust Act 2042 (1985), the mandate of the Trust is as follows:

Preamble: Whereas, it is expedient to provide for the Lumbini Development Trust, in order to present the commitment of Government of Nepal to project the goal and ideal of development of Lumbini more effectively before the world community, and to operate the Lumbini Development Plan in a more coordinated and smooth manner, the Act is promulgated.

Definition (Section 2): "Lumbini Development Area" means and includes the places Tilaurakot (ancient Kapilvastu) Gotihawa, Niglihawa, Sagarhawa, Sisaniyakot, Araurakot, Kudaan (Kapilvastu), Devadaha (Rupandehi), Ramgram (Nawalparasi), which are directly or indirectly related with the life of the Lord Buddha and his birth place, Lumbini and it shall include other areas as specified by Government of Nepal by a notification in Nepal Gazette. Provided that, while specifying places in such manner, only the places which are directly or indirectly related to the life of the Lord Buddha may be specified.

Trust to be an Autonomous Body: The section 4 establishes the Trust as an autonomous body sets forth following provisions:

(a) The Trust shall be an autonomous and corporate body with perpetual succession.

(b) The Trust shall have a separate seal of its own for all its functions and operations.

(c) The Trust may acquire, use, sell or dispose of or otherwise manage its movable or immovable property like an individual.

(d) The Trust may sue or be sued in its own name like an individual.

Objectives of the Trust: In the Section 6, the objectives of the Trust, as per the policy approved by Government of Nepal, shall be as follows:

(a) To obtain or arrange for obtaining contribution of cash, in-kind, or any other type of assistance for the plan from any sector within or outside the Nepal.

(b) To collect or arrange for collecting contribution for the plan from within or outside the Nepal.

(c) To establish direct contacts with individuals or institutions within or outside the Nepal for the purpose of obtaining assistance or collecting contributions for the Plan.

(d) To make available funds for the plans approved after analyzing work plans.

(e) To depute a member or any other person to inspect whether or not funds allocated for specific programmes as approved by the Committee (Board of Trustees) have been properly utilised.

(f) To introduce changes in the work plan if so deemed necessary in the interest of the Plan.

(g) To form committees and sub-committees within or outside the Nepal as required for fulfilling the Plan.

(h) To evaluate the functions and operations of committees and subcommittees constituted under Clause (g).

(i) To formulate policies for the committees and sub-committees formed under Clause (g) and issue Guidelines.

(j) To maintain close and cooperative relations with Government of Nepal.

(k) To perform or cause to perform other necessary functions in order to achieve the objectives of the Trust.

Fund and Accounts (Section 13):

(1) The Trust shall have the right to collect contributions for the Lumbini Development Plan from any part of the world and in any currency.

(2) The Fund shall comprise of the following amounts:

(a) Amounts provided by Government of Nepal for the Plan.

(b) Contributions made by individuals and organizations within or outside the Nepal for the Plan.

(c) Amounts received from other sources.

(3) The amount of the Trust may be deposited in any currency in Nepal Rastra Bank or any other bank in Nepal or abroad.

(4) All expenditures to be made by the Trust shall be borne by it.

(5) Accounts of the Trust shall be operated in the prescribed manner.

Approval of Government Needed (Section 13A): An approval of Government of Nepal is required for reaching to any agreement by Trust with any national or foreign association or institution while operating own business.

Power to Frame Bye-laws (Section 16): To meet the objectives of this Act, the Committee (Board of Trustees) may frame necessary Bye-laws with the approval of Government of Nepal.

Contact with Government of Nepal (Section 17): The Trust shall maintain contact with Government of Nepal through the Ministry of Youth, Sports and Culture.

Tax Exemption (Section 18): No direct or indirect tax, charge, or fee to be imposed by the Government, or at the local bodies, including all kinds of income tax, property tax, vehicle tax, interest tax, sales tax, registration fees, and customs duty shall be imposed on the capital, income, and property of the Trust. Provided that, Trust shall pay the charges and fees due for any kind of services.