Disability pension remains bone of contention amid defence ministry’s unyielding attitude over ex-servicemen’s appeals

The Central Board of Direct Taxes’ 24 June circular bringing disability pension under the tax scanner is the latest bone of contention between the retired Armed Forces personnel and the government The Central Board of Direct Taxes’ 24 June circular bringing disability pension under the tax scanner is the latest bone of contention between retired armed forces personnel and the government. The circular, without specifying the date from which the rule will be brought into effect, said that tax exemption for disability pension 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”. In January 2019, 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.” The order, which did not specify the taxability of the amount, was a culmination of a decision taken after criticism of a slab-based disability pension suggested by the Seventh Pay Commission in September last year. What further deepens the chasm between the defence personnel and the government is the latter’s treatment of appeals by the former servicemen concerning disability pension.