india

Updated: Jun 25, 2019 23:25 IST

Disability pension and the pension soldiers who have served their full tenure with the three services - Indian Navy, Army, Air Force - will no longer be exempt from income tax, according to a recent notification of the Finance Ministry.

Granting income tax exemptions dates back to 1922 and was one of sops of the British Raj to make military service lucrative for Indians to fight for the crown.

The government order says only soldiers who have been “invalidated” during military service will get exemption.

Soldiers who are entitled to disability pension necessarily don’t have retire or “go home” because of the disability they suffer because of service. Most in the artillery or those who fly fighter planes suffer from hearing disabilities because of loud noise and spine problems because of “G-Force” acting on the body when flying respectively. But, only a few soldiers are compulsorily retired because of the disabilities they sustain during military service.

Currently, both the disability pension and pension of soldiers are exempt from income tax.

However, a new Central Board of Direct Taxes (CBDT) circular says 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”.

There are nearly 25 lakh veterans.

Many soldiers who have served their full tenure including chiefs get disability pension.

There have been allegations of misuse of disability pension. In the current fiscal Rs 1,12,080 crore has been allocated for pension.

The burgeoning pension bills for the armed forces have been cause of concern for the government which implemented the long-standing demand of “One Rank One Pension” demand of the armed forces in 2014.

The fresh order has evoked a strong reactions among veterans.