Karnataka Government Introduces Tax Reform for State Temples: All You Need to Know

The Karnataka government has passed the Hindu Religious Institutions and Charitable Endowment (Amendment) bill, signalling a restructuring of the taxation framework for state-owned temples. According to a report by TOI, the bill aims to increase taxation on temple earnings for the betterment of Hindu shrines across the state.

Key Amendments:

Under the provisions of the new legislation:

• Muzrai class ‘A’ temples earning more than Rs 1 crore annually are mandated to contribute 10% of their income to a common pool known as Dharmik Parishad.
• Shrines earning between Rs 10 lakh to Rs 1 crore must contribute 5% of their income to the same pool.

This marks a departure from the previous matrix, where temples earning over Rs 10 lakh contributed 10% of their net income, and those earning between Rs 5 lakh and Rs 10 lakh contributed 5%.

Justification and Clarification:

Chief Minister Siddaramaiah has vocally defended the bill, asserting that the taxes collected will be exclusively directed towards Hindu shrines’ welfare. As reported by TOI, he emphasized that these funds will be utilized for the betterment of priests, pilgrim facilities, and temple infrastructure, particularly focusing on temples with modest earnings. Importantly, Siddaramaiah clarified that the funds will not be diverted to non-Hindu institutions, assuaging concerns regarding the bill’s intent.

Legislative Reception:

During the bill’s deliberation, BJP MLAs notably did not oppose it. Some members even suggested leveraging funds from prosperous temples to uplift those with lower revenue, indicating bipartisan support for the bill’s objectives.

Historical Context:

Siddaramaiah underscored that temple taxes have been collected since the enactment of the Act in 1997, with the common pool consistently earmarked for Hindu religious purposes. He further highlighted that since the implementation of the Hindu Religious Institutions and Charitable Endowment Act in 2003, the common pool has remained dedicated solely to Hindu religious initiatives.

The passage of this bill reflects the government’s commitment to bolstering the infrastructure and resources available to Hindu shrines across Karnataka, ensuring their continued vitality and service to the community.