SC to Decide upon Applicability of Income-Tax Exemption on Nuns & Priests Working as Teachers in Govt Aided Christian Missionary Schools
Applicability of Tax Exemption on Nuns & Priests: The Supreme Court has recently acknowledged the significance of addressing a crucial legal question regarding the eligibility of nuns and priests, who serve as teachers in government-aided Christian missionary schools, for income tax exemption. This development comes in response to the urgent plea filed by various dioceses and congregations from Tamil Nadu and Kerala, seeking clarity on the matter.
Background
In December 2014, the Income Tax department mandated tax deduction at source (TDS) for individuals employed as teachers, prompting several dioceses and congregations to challenge this directive. Despite unsuccessful attempts in the high courts of Madras and Kerala, nearly 100 entities have now approached the Supreme Court to contest the denial of income tax exemption.
Key Arguments
Senior advocate Arvind Datar, representing the dioceses and congregations, emphasized that the income earned by nuns and priests working as teachers ultimately belongs to the congregation operating the school. The plea contends that these educators do not personally acquire the salaries paid to them. This critical distinction forms the crux of the ongoing legal debate.
High Court Rejections
The high courts in Madras and Kerala previously dismissed the pleas for income tax exemption, leading the aggrieved parties to seek redress in the Supreme Court. The rejection at the state level has intensified the need for a comprehensive examination of whether nuns and priests, as teachers, should indeed be subjected to income tax.
Historical Perspective
The plea underscores that government-aided missionary schools enjoyed income tax exemption from 1944 until the central government introduced the tax deduction at source regulation in 2014. The historical context adds weight to the argument that a reconsideration of the tax implications is essential.
Conclusion
The Supreme Court’s decision to scrutinize the eligibility of nuns and priests working as teachers in Christian missionary schools for income tax exemption marks a crucial juncture in this legal saga. The outcome of this deliberation is anticipated to have far-reaching implications for religious institutions, educators, and the broader taxation framework. As the case progresses, stakeholders eagerly await a resolution that will bring clarity to this intricate intersection of religious service and tax obligations.
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