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Supreme Court to review tax exemption for teaching nuns and priests

January 19, 2024

The Supreme Court has agreed to address a crucial legal query regarding whether nuns and priests, employed as teachers in government-aided Christian missionary schools, are eligible for income tax exemption. Senior advocate Arvind Datar presented the urgency of the matter, representing several dioceses and congregations from Tamil Nadu and Kerala. The Chief Justice D Y Chandrachud-led bench, including Justices JB Pardiwala and Manoj Misra, acknowledged the need for an expedited hearing and is considering listing the plea.

The central issue revolves around whether the income of nuns and priests engaged in teaching roles can be subjected to income tax. In 2014, the Income Tax department instructed educational authorities to implement tax deducted at source (TDS) for individuals working as teachers. Subsequently, nearly 100 dioceses and congregations from Tamil Nadu and Kerala contested this decision in the high courts, leading to the current appeals in the Supreme Court.

The plea argues that the income earned by nuns and priests ultimately becomes the income of the congregation operating the school. According to the plea, these teachers do not personally acquire the money paid as salaries. Despite the longstanding history of income tax exemption for government-aided missionary schools dating back to 1944, the union government introduced tax deduction at source in 2014, prompting these legal challenges.

The high courts in Madras and Kerala previously rejected the appeals for income tax exemption, prompting the dioceses and congregations to seek resolution at the Supreme Court. The court’s examination of this matter holds significance for the broader question of the taxation status of individuals serving in religious and educational capacities.

Source: PTI

Also read: Minority schools oppose Gujarat Secondary & Hr Secondary Education Act

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