Supreme Court to take call on TDS for nuns and priests at government-aided schools

NEW DELHI: Should salaries of

nuns

and

priests

working as teachers in government-aided Christian missionary schools be subjected to

income tax

?

Supreme Court

has agreed to adjudicate this question raised by nearly 100 dioceses and congregations from Tamil Nadu and Kerala.
The main ground taken in these appeals is that incomes of nuns and priests become the income of the congregation which runs the school and that these teachers personally do not acquire the money paid as salaries.

The income gets transferred to the congregation or diocese running the school, and the congregation submits returns wherever necessary.
A bench headed by CJI D Y Chandrachud agreed to examine this question after senior advocate Arvind Datar said that 78 of the appeals are against decisions of the Madurai bench of Madras HC which had rejected their plea for exemption from I-T, a relief enjoyed by aided missionary schools since 1944 for 70 years till the Centre decided to impose tax deduction at source in December 2014.
Datar and advocate Romy Chacko said nuns and priests take a vow of renunciation and their salaries get transferred to the diocese or congregation immediately after being deposited in their accounts. The bench posted the matter for hearing after three weeks.

One of the petitioners said, "To become a 'nun' and member of a congregation, a candidate has to undergo rigorous training and at the final stage she has to take three sacred vows - of obedience, chastity and poverty."
"Once a candidate becomes member of a congregation, she cannot own any property and cannot have any income of her own... These sisters, by renouncing their worldly lives, dedicate themselves as servants of God and spend their lives for charitable purposes and services like, education, health, rehabilitation of the poor, orphans and destitutes. They do not marry... They do not have family lives. They live in abstinence by leading an ascetic life," she said.

The 1944 Central Board of Direct Taxation (CBDT) circular had said, "No I-T should be levied on fees received by missionaries for services rendered by them, which by the conditions of their service and the rules of their society, they are required to make over to the society". A 1977 circular had echoed this.
However, on December 1, 2014, I-T department instructed state educational authorities to effect

TDS

from members of all religious congregations receiving salaries from the government. This was unsuccessfully challenged before Madras and Kerala HCs. These decisions are now being challenged before SC.