In another move that will irk military Veterans, the government has decided to levy Income Tax on Disability Pension awarded to those who retire after full service or superannuate. The same however won’t be applicable to those ‘invalided out’ of service, where service personnel are released from service before their full tenure owing to severe or extensive physical injury. This has been announced in a new circular by the Ministry of Finance’s Department of Revenue issued on June 24, 2019.
It says: “Further, such tax exemption will be available only to armed forces personnel who have been invalided out of service and not to personnel who have been retired on superannuation or otherwise.” The circular has been signed by Rajarajeswari R., an Under Secretary level officer in the Department of Revenue. Fauji India is in possession of the circular. This means, those nearing the end of their full tenure, or taking a Pre-Mature Retirement (PMR) and are declared eligible for Disability Pension by medical boards will have to pay Income Tax. The circular however does not clarify when the new rule will come into effect.
This adds to the repertoire of let downs on pension, pay and service-related demands to the military, beginning with giving only 80% of One Rank One Pension (OROP), downgrading them before the civil services in the 7th Central Pay Commission, challenging Disability Pension cases won by servicemen in the Armed Forces Tribunals in higher courts and withholding the application of Non-Functional Upgrade to serving military personnel.
Maj Gen Satbir Singh (Retd), Chairman of the Indian Ex-Servicemen Movement (IESM) expressed outrage at the move, saying he was “dead against” any such action by the government. “This government has declared a war on soldiers by withdrawing all basic privileges,” he said.