No, religion-based tax exemptions are not given to religious trusts in India

By: Vivek J
June 9 2023

Share Article:

Context

A video that shows people filling gunny bags with cash is being widely circulated on social media to claim that madrasas are exempt from paying taxes in India, while temples have to file taxes. It goes on to allege that temple donations are used to pay the salaries of Muslim clerics.   

The post, which is originally in Hindi, claims, “See, how much money comes into mosques. There is no tax on this money. Only temple money is taxed. Government gives salary and pension to clerics from the money received by temples. The donation received by mosques is used against Hindus.”  

However, the claims made in this post are incorrect. The video is not from India but Bangladesh. And there is no religion-based tax exemption given by the government. 

In Fact

On closely looking at the video shared in the tweet, we noticed that the currency in the donation boxes was not Indian. It was Bangladesh's currency and the picture on the notes was that of Sheikh Mujibur Rahman, who is popularly called the founder of Bangladesh.  

We looked for news reports and YouTube videos of money collected from Bangladeshi religious institutions and came across several news reports showing similar video clips. By visually comparing these news clips, we were able to ascertain that this video was from the same incident. 

According to a Bangladeshi news outlet, Bangla News 24 report, 19 sacks of money were collected from the Pagla Masjid in Kishoreganj, Bangladesh, on May 6, 2023. A YouTube video uploaded by Somoy TV on the same day shows one of their reporters on ground showing the same visuals shared in the viral tweet. Thus, it is evident that the video shared in the tweet is not from India.  

What about taxing religious places?

On conducting a basic keyword search, we came across a series of tweets by the Indian Ministry of Finance dated July 3, 2017, stating, “There are some messages going around in social media stating that temple trusts have to pay the GST (Goods and Services Tax Bill) while the churches & mosques are exempt. This is completely untrue because no distinction is made in the GST Law on any provision based on religion. We request to people at large not to start circulating such wrong messages on social media (sic). ” 

According to the Central Board of Indirect Taxes and Customs (CBIC), “The provisions relating to the taxation of activities of charitable institutions and religious trusts have been borrowed and carried over from the erstwhile service tax provisions. All services provided by such entities are not exempt. In fact, there are many services that are provided by such entities which would be within the ambit of GST.”  

Some of the exemptions include: a) conduct of any religious ceremony b) renting of precincts of a religious place for the general public, with an exception of renting of rooms where the charges are Rs 1,000 or more. The exemption doesn’t include renting of community halls, premises where the cost is Rs 10,000/per day or more, and renting of shops/spaces where charges are Rs 10,000 or more per month.  

There is no distinction mentioned between religious places and the website mentions all religious places.

Further, the Income Tax Department’s website (last updated on 1 April 2023) lists exemptions for charitable and religious trusts and nowhere does it mention anything specifically about temples being taxed, but not mosques. 

“Income of a charitable and religious trust is exempt from tax subject to certain conditions. The exemptions are provided to the trusts under various provisions,” it reads.  

The Verdict

The video is from Bangladesh and doesn’t show a mosque in India. Secondly, the government of India does not provide any special exemption for particular religious trusts or organizations from paying taxes. Therefore, we have marked this claim as false.