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Exemption from Property Tax
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Exemption from Property Tax

21 May 2021 12:18 pm

Justices RF Nariman and BR Gavai

The Hon’ble Supreme Court has held that residential accommodation for nuns and hostel accommodations for students which are attached to various educational institutions can claim property tax exemption under section 3(1) (b) of the Kerala Building Tax Act, 1975. It was further stated that that buildings owned by educational institutions for providing hostel accommodation to students qualify for building tax exemption under clause (b) of Section 3(1) of the Act. However all buildings accommodating students do not qualify for building tax exemption because there are so many lodge buildings constructed by various people around educational institutions which do not have hostel facility, to rent out to students in such educational institutions. Letting out of buildings by private agencies is a commercial activity whether tenants are students or not. In other words, only hostel buildings owned by educational institutions for accommodating its own students in such hostels will qualify for exemption under clause (b) of Section 3(1) the Act. If nuns are living in a neighboring building to a convert only so that they may receive religious instruction there, or if students are living in a hostel close to the school or college in which they are imparted instruction, it is obvious that the purpose of such residence is not to earn profit but residence that is integrally connected with religious or educational activity.

Government of Kerala vs. Mother Superior Adoration Convent
(Civil Appeal No. 202 of 2021)


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