india

Updated: Jul 03, 2019 23:02 IST

Can nuns and priests be asked to pay income-tax if they draw their salary from state-funded or privately managed institutions? The Supreme Court has agreed to look into this question of law as 41 Christian religious institutions have approached it with a plea to exempt them from paying income-tax.

These institutions, based in Kerala and Tamil Nadu, have moved the top court against Madras high court’s verdict in March this year upholding a 2015 income-tax department circular, ending the 70-year-old practice of exempting priests and nuns from paying tax on the ground that they donate their salaries to religious institutions they are engaged with.

The HC had held that salaries are received by individuals and surrendering them can only be treated as “application” of their income. The court said neither the income-tax department nor the state government had anything to do with the religious character of the institution. Teachers may be nuns or missionaries but that cannot be a reason for seeking exemption from paying tax, it said.

A bench led by Justice Ashok Bhushan issued notice to the Centre and the Central Board of Direct Taxes. In some cases, response has also been sought from Chennai’s income-tax department that implemented the CBDT circular in the same year as it was issued. According to the petitioners members of the congregation are bound by a codified religious discipline and they profess perpetual vows of chastity, obedience and poverty