(ZENIT News / New Delhi, 11.12.2024).- In a landmark decision, India’s Supreme Court has ruled to end a 1944 colonial-era exemption that allowed Catholic priests, brothers, and nuns employed in government-funded educational institutions to be exempt from income tax on their salaries. This ruling, delivered on November 7, mandates that clergy working in schools and colleges funded by the government must now pay taxes on their earnings, a decision that closes a legal chapter stretching back almost 80 years.
The court’s three-judge panel, led by Chief Justice DY Chandrachud alongside Justices JB Pardiwala and Manoj Misra, dismissed 93 appeals filed against a 2014 directive from India’s Income Tax Department. That directive required state governments to deduct tax at the source before paying clergy working in these educational institutions. The original exemption was implemented during British rule as part of efforts to promote education, including in remote areas where Catholic institutions were often among the few available.
Representatives of the Church had argued in court that Catholic clergy, due to their vows of poverty, hold no personal property and their salaries are transferred directly to their congregations, rendering them distinct from ordinary taxpayers. Church legal advocates contended that these unique conditions should continue to justify tax exemption. However, the Supreme Court dismissed this argument, holding that religious vows or lack of personal property do not negate taxable income. Instead, the court emphasized that income derived from employment is subject to taxation regardless of an individual’s lifestyle or vocational commitments.
Father Maria Charles, secretary of the Catholic Bishops’ education office, commented on the ruling after hearing of it through the media. He stated that he would reserve further comment until receiving an official copy of the court’s decision.
India’s Catholic Church, which oversees more than 50,000 educational institutions—including 400 colleges, six universities, and six medical schools—will now see a change in the financial landscape of its faculty. The ruling sets a precedent for the uniform application of tax law, underscoring that all salaried individuals, regardless of religious vows, fall under the nation’s tax obligations.
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