New Delhi: Disability pension will be taxable for military personnel who superannuated under normal circumstances, defence sources said on June 25.
Non-taxable pension will be provided to only those personnel who had to retire because their disability was ‘sustained or aggravated in service’, the sources added.
Citing a Finance Ministry circular dated June 24, sources said, “Tax exemption will be available to armed forces personnel who have been invalidated 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.”
This means that personnel with disability who retire in the regular way after completing their full service will not be eligible for the tax exemption.
Notably, the circular remains mum over the date of implementation of the order. In a report by Times of India, a veteran said, “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.”
Armed Forces personnel who suffer any kind of disability due to their service receive a separate disability pension. The amount depends on their rank and the kind of disability.
The government had earlier cleared a long-standing demand of the Army veterans by passing the “One Rank One Pension” bill in 2014.
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