Income Tax Not Applicable on Disability Pension for Defense Personnel

The Ministry of Defence has instructed its accounts department to withdraw the circular that directs the banks to deduct income tax from pensioners who are affected by disability. The decision taken last year had made it bitter for the retired personnel and the other armed forces as well.

The Defence Ministry had decided to provide income tax exemption on the disability pension only for that military personnel who were invalidated from service due to disability. It was highlighted that the benefit was not available for those with disabilities who retire after completing the service.

Also Read: Pensioners Who Opted for Commutation To Receive Higher Pension

Such a decision had led to a huge discussion across the country and in the defence fraternity. The Defence Minister Rajnath Singh had promised to look into the matter. Later, the three services chiefs had later recommended that disability pension for military personnel should be given income tax exemption only up to a certain limit.

For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in

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