10 Jul 2011

Taxing Religious Institutions in India

For long the government of India has followed a policy of providing subsidies for religious events be it the Haj or be it the Kumbh Mela. For the Kumbh Mela it is more about providing the infrastructure but its the same thing. Recently while reading a blog, I read that every year the govt of India spends more then Rs 600 crore as Haj subsidies. That is so not good. Its vote bank politics at play, a very common thing in India but not a good thing. And if we take a look at the Kumbh Mela then it is a lot more considering the amount of infrastructure the government builds for the event. So all in all is this an unnecessary waste of our hard earned tax money?


Source
      There is no clear majority on this as some people say that it is a waste while the others support these subsidies and in fact have even urged the government to increase them. I for one am against them. What I believe is that in case of the Haj, the Muslim law states that each person must complete this journey to Haj on his own and using his own resources. Thus to many Muslims this subsidy that the government provides is insulting as it is against that law and I support them if they feel so. Because if such a journey has to be made, then to keep it pure, the individual must exclusively use his own resources and not depend on others. 


      In case of the Kumbh Mela or Amarnath Yatra for that matter. I feel that the government should not heavily invest in infrastructure for short term events like these as they happen at one place and then at another. Thus there is no productivity in it. Besides I feel that the amount of money that the government has spent on such holy pilgrimages would have been enough to develop another Bandra-Worli sea link located in Mumbai and a lot more. But that hasn't been done. The money that the tax-payers earn after having slogged in whether it is their office or in their shops or any place for that matter is being used for this. Of course, if one talks about security then yes, the state must take care of the security issues but that must be the only expenditure made by the state in this regard. The infrastructure that needs to be developed must be developed by the religious bodies which organise these events as they are after all religious institutions established to aid and help every devotee and individual to make their respective pilgrimages. They must not act like profit guzzling private sector institutions.


Source
      Another thing that I'd like to talk about would be the Taxation Policy of the Government of India in regards to Religion which states that all organisations set up for religious purpouses shall be exempt from taxation. I do not agree with this clause that is there in the India Tax Act, 1961. What I do not understand is why is it that common people like me and you who work hard and do some good with it are taxed and while religious institutions which hardly ever function to do what is demanded of them are not taxed. If you look at it from a numerical point of you then I can say that the religious institutions are the richest in the country. The best example is a temple which has got gold ornaments for the god that resides in that temple. Thus it is quite foolish to tax us who have limited income and not them who have an unlimited income.


      Of course some people might raise the point that religious institutions are many a times charitable in their deeds. They open up schools and hospitals but I would like to ask if whether it is certain that all do that? And if the money from their charitable endeavours if I may say so ever even reaches the needy. If they are engaging in charitable activities and if that has been verified by the government then it is good, they should be given some tax benefit. But while talking about religion and charity, I can't help but bring up the topic of a recently deceased 'saint' who was supposed to be engaged in charitable activities and how his death resulted in a major public figure being caught crying on camera but what I really mean to say over here is that even though he may have been indulging in charitable activities but then why are trucks being ceased with millions of rupees going out from the city of his residence?


      Is there something else that we are not seeing that is there in all of this tamasha, if I may label it that. I won't get into whether there was something more or not for the simple fact that there is nothing to explain. The picture is crystal clear. Something was going on if truck loads of money is being transported from one place to another. However what I would like to point out is that according to the India Tax Act, 1961, all anonymous donations can be taxed till the marginal rate of 30%. And if the income is about 5% of the total income of the institution then it may not be taxed. I think that it is a rather surprising clause.

      It is common sense that if a person wants to convert black money into white money then he will donate it to some institution specifically religious or charitable and then cut a deal with the owner and he will get his money white and part of it will go into the pocket of the chairperson or owner of the institution. And not to forget that what I mentioned above is not application to places of worship like temples, churches or mosques. Thus I think it is a loophole that can be easily exploited. Religious institutions however sacred they are must never interfere with the functioning of the state but yet at the same time they must pay their dues (taxes) like any institution located in the state. People may say that if they are being taxed then they have a right to their opinion and all but according to me religious institutions with huge followings should not make any statements regarding the administration of the state or the policies followed by the state for the simple reason that even they may have meant it in goodwill but people in trying to implement that 'goodwill' might not remain within the civil boundaries that the constitutions marks for the citizens of the country.

Source
      And the last point that I would like to raise is about the recent treasure worth Rs 1000 lakh crore or about $22 Billion which was found in a temple in Kerala and the ongoing debate regarding the ownership of the treasure. Many devotees have said that the treasure belongs to the temple but I would like to ask them what use is treasure to a temple? Gods have always been against materialistic desires and thus speaking from a devotee's point of view I think that it is an insult to them. And another thing is that even though the treasure was found in the temple but it belongs to the people of India and thus the government should at the most give the temple the founder's share or 10% of the total worth of the treasure which is not a small amount and the treasure should be hosted museums because it is the property of the people. Now if people start questioning ownership on the basis of religion then I will like to remind them that many Hindus like me are not in favour of a treasure being kept in a place as sacred as a temple and the treasure also belongs to us and thus it is public property and hence should be housed in a museum.

      Thus all in all, religion and money are not a good combination although they are a dominant combination for the simple reason being that religion no matter what it is was always meant to be sacred and pure and this introduction of money into the sphere of religion has spoilt that purity that it enjoyed previously while at the same time giving rise to corruption and if I may say insuring that the government losses money. Thus money and religion should be kept separate otherwise there will not be difference between them and the profit-making private institutions. In the end, I would like to just say that this article was not meant to criticise anybody and that it was only meant to shed some light on many facts that people are not aware of. Hence this article should not be taken in the wrong sense.

1 comment: