Govt To Levy Tax On Disability Pension Of Armed Force Personnel

The Logical Indian Crew India

June 26th, 2019 / 6:19 PM

Pension No Longer Tax-Free

Image Credit: Hallmark Public School

Income tax on disability pension will be levied on officers of all rank who retire from their services (Indian Army, Indian Air Force and Indian Navy) under normal circumstances or attained superannuation, according to a recent notification of the Finance Ministry. Disability pension for armed forces will only be tax-free for those who had to leave the service due to injuries suffered while on duty. 

“Such tax exemption will be available only to armed forces personnel who have been invalidated from service on account of bodily disability attributable to or aggravated by such service and not to personnel who have been retired on superannuation or otherwise,” stated a circular issued by the Finance Ministry. However, there is no mention of whether the move will be retrospective.

The order has emanated strong criticism from veteran officers, and many have said that this is a new way to further cut down the benefits of the armed forces. “The finance ministry and CBDT contend they are just clarifying or interpreting the existing rules based on some representations they have received…the move is clearly mischievous,” an army veteran told The Times of India

In the past, there have been allegations of misappropriation of disability pension. “But a few aberrations should not lead to such an illogical step to penalize everyone,” said another veteran. 

Currently, disability pension of soldiers is exempt from income tax and many soldiers who have served their full tenure get a disability pension. Although, after “One Rank One Pension” scheme was implemented in 2014, the rising pension bills have been the cause of concern for the government. For the current fiscal year, Rs 1,12,080 crore has been allocated for the pension.


Also Read: How A 91-Year Old Retired Army Veteran Has Started His New Life As A Social Entrepreneur In Organic Food


Contributors

Written by : Satendra

Edited by : Shraddha Goled

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