Are Ayodhya temples tax-free? No, there’s a catch, and priests aren’t happy about it

Ayodhya's civic body has waived property, water and sewage taxes for its temples, mutts and introduced a 'symbolic' tax. However, priests say it benefits only bigger entities.

File photo of Ayodhya, Uttar Pradesh | Photo: ANI

Ayodhya: In keeping with Yogi Adityanath government’s 2022 promise, the municipal corporation of Uttar Pradesh’s holy city, Ayodhya, has waived the property, water and sewage taxes that were being levied on temples and mutts. In its place, the civic body introduced a “symbolic tax”.

However, this symbolic tax, which was implemented on 1 April, 2023, has faced significant resistance from many priests who claim that the system benefits bigger entities, official sources from the Ayodhya Nagar Nigam, told ThePrint.

The yearly tax being levied is based on the size of the area the mutt or temple is set in — Rs 1,000 (for up to 1,000 sq feet), Rs 3,000 (1,000-3,000 sq feet) and Rs 5,000 (above 3,000 sq feet).

After last year’s announcement, the tax department officials had conducted a survey and by September prepared a list of 1,080 such entities in Ayodhya which would be exempt from property, water and sewage taxes. However, sources in the Ayodhya municipal corporation said that several mutts and temples were found indulging in commercial activities and were removed from the list.

“Since, only those mutts and temples were to be exempted which were not indulging in commercial activity, these were removed from the list. Now, 783 such mutts and temples are in the list,” a municipal corporation official told ThePrint on condition of anonymity.

Of these 783 though, only 400 have paid the symbolic tax, sources said.

“Around 400-500 of the mutts and temples are paying the tax but others are not paying because they are resistant,” the official added.

Several priests claim that it is the small mutts and temples that are resistant to paying this tax because they feel that while they are have officially been brought under the tax regime, the big temples and mutts which are set in an area of over 5,000 square feet are paying minimal tax.

“Small mutts are being charged while big temples and mutts are evading any big tax,” said

Mahant Dharmdas, the head of the Nirvani Ani Akhara, to ThePrint. Dharmdas was also one of the plaintiffs in the Ram Janmabhoomi case and his Akhara is associated with one of the pattis (streams or schools) of the iconic Hanumangarhi temple.

A municipal corporation official explained to ThePrint, “Earlier, taxes were being paid by mutts and temples but many entities had been avoiding payment, anticipating that the Yogi Adityanath government would take heed of the priests’ demands to make the mutts and temples completely tax-free.”

“However, now since the symbolic tax has officially been levied, most big mutts and temples are liable to pay only Rs 5,000 yearly. The priests running small mutts and temples feel…that a mutt set in 5,000 square feet can’t be compared to one set in 15,000 square feet,” the official added.

Officials told ThePrint that while there are several mutts and temples set in up to 10,000 square feet area, only a few are set in over 15,000 square feet.

“If genuine sadhus, who are not indulging in greed and commercialisation, are being exempted from tax payment, it should be welcomed. But there are many who are running businesses out of mutts and temples and there are members of the public who claim to have temples inside their homes to gain profit,” said Mahant Dharamdas. “Such people should be identified and discouraged.”

Municipal corporation officials said that there are several entities which have not paid the tax despite bills being generated and sent to them via SMS service and in written form. A penalty of 12 per cent of the total tax will be imposed on them for late payment.

“There is resistance to tax payment as of now because many mutts and temples were not paying the same and have now officially become liable to pay the tax. They will be charged 12 per cent interest of the total tax,” a corporation official said.

Reality check

Priests like Nritya Gopal Das and Suresh Das — both prominent figures of the Ram Janmabhoomi movement — had met Chief Minister Yogi Adityanath during his previous tenure and demanded that all of the city’s mutts and temples be officially made tax-free.

Welcoming the move to remove all three taxes, Mahant Satyendra Das, the chief priest of the makeshift shrine in the under-construction Ram temple, said that there are many temples and mutts which are self-sustained and run only on donations and chadhava by devotees.

However, tax evasion has always been an issue in Ayodhya, said tax department officials.

While several mutts and temples were not paying house, water and sewage taxes, according to prominent saints of the temple town ThePrint spoke to, officials say that even commercial and residential entities were evading tax.

Speaking to ThePrint, K.C. Sudershan, tax assessment officer, Nagar Nigam Ayodhya, told ThePrint that out of 44,218 entities in the municipal corporation area, only 6,555 entities were paying tax till last year.

“Owners of many entities, including mixed properties, commercial and residential, were avoiding tax,” he said.

Several priests and mahants ThePrint spoke to admitted to having paid since Ayodhya became a municipal corporation from a nagar palika.

“Mutts and temples were not paying taxes soon after Ayodhya became a municipal corporation,” Mahant Satyendra Das, the chief priest of the makeshift shrine in the premises of the under-construction Ram temple told ThePrint.

Ayodhya’s tax rules

Additional municipal commissioner, Ayodhya, Arun Kumar Gupta, told ThePrint that the municipal corporation has been levying 23 per cent of the annual rental value (ARV) of a residential property as tax so far.

“Under the arrangement, any property owner had to pay a total of 23 per cent of the total ARV of the property as tax. This included: property tax (10 per cent of ARV), water tax (10 per cent of ARV) and sewage tax (3 per cent of ARV),” said Gupta.

ARV of a property is calculated on the basis of the per square feet rental value of a property which varies between 60-85 paise in Ayodhya, depending on the locality.

For instance, if a property owner has a property in 1,000 square feet of land in Ayodhya in a locality with monthly rental value of Rs 60 paise per square feet, he will be liable to pay Rs 600 as monthly tax or Rs 7,200 as yearly tax.

Commercial entities like hotels, guest houses, coaching centres, shopping complexes, general stores, etc, are liable to pay five times the tax charged against residential property while five-star hotels have to pay six times this tax.

Nursing homes, hospitals and marriage lawns are liable to pay three times the amount of tax that a residential property owner will pay.

While Ayodhya became a municipal corporation in 2017, an official declaration to make mutts and temples tax-free first came in 2022, when the CM visited Ayodhya soon after winning a second term, show media reports.

Soon after, the municipal corporation started the process to remove the three taxes, and in May 2022, it passed a proposal for the tax exemption to mutts and temples in the municipal corporation board, while stating that those entities which are indulging in commercial activity will get no such relief.

“The priests had demanded that the temples and mutts be made completely tax-free. However, the municipal corporation board did not agree to this and suggested that a token amount be charged, as making the entities completely tax-free was not feasible,” a tax department official told ThePrint on condition of anonymity.

Burden on municipal corporation

According to Ayodhya municipal corporation officials, there are around 8,000 mutts, temples, ashrams and residential buildings within the limits of the Ayodhya zone.

“Of these, 1,080 have been identified as mutts, ashrams and temples. The rest, about 6,900 are residential entities which are liable to pay property, water and sewage taxes,” said Subhash Tripathi, tax superintendent, Ayodhya municipal corporation.

Vinod Gaur, tax inspector, Faizabad zone, told ThePrint that the corporation was earning a total of around Rs 3 crore from these 8,000 entities.

“Out of this amount, the corporation will bear around Rs 40.5 lakh of the tax burden if all of these 1,080 entities are exempted from paying these taxes. Although, this figure is not final and has been revised after objections,” Tripathi said.

While mutts and temples will be completely exempted from payment of taxes, the municipal corporation will charge these taxes from entities of mixed nature, i.e that are residential and commercial, and those which are completely commercial in nature.

“There will be many entities which will fall under the mixed category. These may include those entities which have a temple and a shop in the same premises. In such cases, exemptions will be made only to the temple area and not the residential or commercial area,” added Tripathi.

(Edited by Zinnia Ray Chaudhuri)