Supreme Court Rejects Pleas for Exempting Salaried Nuns from Income Tax

Recently, in India, the Supreme Court dismissed 93 petitions filed by missionary groups seeking exemption for salaried nuns from paying income tax. The petitioners argued that once nuns accept their vows of poverty, they enter a state of “civil death” and have no individual rights to property; thus, they should not be liable for taxes. This argument was declined by the court.

A three-judge Bench, headed by the Chief Justice of India, based its judgment on the principle that any person drawing a salary is liable to pay income tax, regardless of religious status. The Chief Justice remarked, “What is the use when they say they are nuns and not pay tax?”

The court clarified that whether a salary is retained by the individual or transferred to the diocese or congregation is immaterial since such income is subject to tax regardless of its ultimate use.

The petitioners contended that salaries earned by nuns are not for personal use but are directed to their congregations. They argued that nuns, after taking the vows of obedience, chastity, and poverty, give up all personal ownership and worldly possessions. These religious women lead ascetic lives and do not marry. The petitioners claimed that the income earned should be considered as belonging to the congregations, which would file tax returns if required.

One petition highlighted that, upon taking the vow of poverty, a nun renounces all earthly ties, including any inheritance rights from her natural family. This renouncement, referred to as a form of “civil death,” would prevent a nun from inheriting property from deceased family members.

The missionaries challenged a directive issued by the Income Tax Department on December 1, 2014, instructing educational authorities and district treasury officers to deduct tax at source (TDS) from members of religious congregations receiving salaries from the government. The matter had previously been presented to the Kerala High Court, which upheld the directive, ruling that religious orders’ internal laws could not override civil law, such as the claim of a congregation to have an “overriding title” over its members.

This Supreme Court ruling serves as a landmark decision in the ongoing debate over the application of income tax laws to individuals with religious commitments, affirming that all persons, regardless of their level of religious devotion, share equal tax obligations.