Quick Summary
In a landmark judgment, the Supreme Court on Thursday upheld the Madras High Court's ruling that salaries paid to priests and nuns working as teachers in church-run, government-aided schools are subject to income tax. The court dismissed arguments that religious vows of poverty and the charitable status of dioceses exempted these earnings from Tax Deducted at Source (TDS). A single-judge bench of the Madras High Court initially sided with the priests and nuns, ruling that, per canon law, their
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FAQ :
Yes, the Supreme Court has ruled that salaries paid to priests and nuns working as teachers in church-run, government-aided schools are subject to income tax.
It was argued that religious vows of poverty meant the income was for the diocese, not personal benefit, and that the charitable status of dioceses should grant exemption.
The court stated that the salary funds are grants to the schools, not the diocese, and once allocated to the teachers as employment earnings, they attract tax liability.
This ruling sets a precedent for tax obligations on religious individuals employed in government-aided roles, indicating a shift in how religious orders' income is interpreted for tax purposes.
Yes, the Supreme Court advised that priests and nuns may claim a refund on TDS deductions if they are eligible.
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