Disability Pension non-taxable only for military personnel

New Delhi : The Finance Ministry on Tuesday ruled that military personnel with disability pension granted will be exempted from the tax benefit if they suffered any kind of disability during their official duty.

According to a media report by India.com, the Central Board of Direct Taxes (CBDT) has issued a circular on Monday clarifying that the ‘income tax exemption’ which is available for the Army, Navy and IAF personnel is not available for those who were retired on superannuation or otherwise.

In the circular, the defence ministry mentioned, "Tax exemption will be available to armed forces personnel who have been invalided from the service on the account of bodily disability attributable to or aggravated by such service and not to personnel who have been retired or superannuated or otherwise."

The report also mentioned that the move is aimed to reduce the benefits that are entitled to the armed forces. A military officer was quoted by Times of India as saying, “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.”

Earlier in the month of January, the Defence Ministry had tweeted, “With approval from Smt @nsitharaman, it has been decided that the disability/war injury pension, special family pension and liberalised family pension shall be minimum Rs 18,000 per month for Defence Forces pensioners/family pensioners, with effect from 1/1/2016.”