Sacred Vows, Secular Laws: SC Mandates Taxes on Nun Salaries
Category: Legal News
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INTRODUCTION
The Supreme on November 7, 2024, dismissed a batch of 93 appeals challenging the application of the Tax Deduction at Source (TDS) on the salaries given to nuns and priests of the Catholic Church who are working as teachers in aided institutions. Some of the missionaries argued that the nuns and the priests enter a State of civil death when they take their vow of poverty and need not pay taxes. However, the Court reasoned that any person who receives a salary, whether a nun or not, has to pay tax.
BACKGROUND
On 7th November 2024, the SC dismissed 93 petitions from various missionaries to exempt salaried nuns from paying income tax. The missionaries argued that nuns and priests enter a state of civil death when they take their vow of poverty and they shouldn’t be paying taxes.
A three-judge bench headed by the Chief Justice of India D.Y. Chandrachud did not agree to the same. The Court said that the laws are the same for everyone and any person who receives a salary has to pay tax whether a nun or not.
The missionaries had argued that the salaries were not used for the personal expenses of the nuns but went to the respective congregations. They had contended that nuns take the three sacred vows of obedience, chastity, and poverty after undergoing rigorous training. They cannot own property and never marry. Nuns live ascetic lives. The income they earn becomes that of their congregations, which submit tax returns if necessary.
The CJI stated that, when an organization pays a salary, whether it is retained by the person or paid elsewhere, either to the diocese or someone else, has nothing to do with taxability.
The various ecclesiastical orders had challenged a December 1, 2014, Income Tax Department directive to educational authorities and district treasury officers to effect Tax Deducted at Source from members of religious congregations receiving salary from the government.
The directive was challenged in the Kerala High Court but without success. The High Court had concluded that canon law tenets like a religious congregation has “overriding title over its members” cannot prevail over civil law.
KEY ASPECTS
Non-personal use of the salary doesn't affect taxability: The Court emphasized that when an organization pays a salary, whether it is retained by the person or paid elsewhere, either to the diocese or someone else, has nothing to do with taxability. Taxability is based on the receipt of income, not how it is used or who ultimately benefits from it.
Separation of Civil and Canon law: The Court highlighted the fact that religious laws cannot overtake civil law. When the nuns argued that their income belonged to their congregations, for which the Court maintained that civil law’s tax provisions take precedence, especially for individuals on government payrolls.
Uniform application of tax laws: The Court stated that the tax laws are universal and are applied to all the individuals receiving salaries. The principle here is that tax obligations are tied to income, not the individual’s vows or end-use of that income.
CONCLUSION
Overall, this ruling of the Supreme Court upholds the fact that the tax laws are universally applied to all salaried individuals, whether a nun or not. The Supreme Court also highlighted that the principle here is that the tax obligations are tied to income and not to the individual’s vows or how they use their income. This ruling of the Supreme Court delivered by the bench comprising Chief Justice of India DY Chandrachud, Justices JB Pardiwala, and Manoj Misra, emphasizes that the rules must be applied irrespective of a person’s salary and the way it is being spent.
