JOIN USHQs suggested disability pension tax: Defence veterans
The controversial decision of making disability pension taxable for defence personnel originated from the headquarters of the defence service and was not taken up suo motto by the Finance Ministry, according to the Economic Times.
Defence veterans told ET that the move took place on the recommendations of the Army, IAF and Navy. Commodore Sudheer Parakala (retd) was quoted in the report. He said, "There is a lot of acrimony about the withdrawal of IT Exemption for disabled personnel. I came back from London and checked with the FM whether it was done by her ministry. It is clarified that it was done on the recommendations of Service HQs (read as headquarters) and not initiated by her ministry".
The change to the disability pension came after a circular from the Finance Ministry’s Central Board of Direct Taxes. The circular stated that the tax exemption would continue to be available to those who are 'invalidated' out of service on the account of a bodily disability that happened due to or aggravated by their term of service. The exemption will not be available to personnel with a disability who retire after a full term of service.
The government's decision to levy a tax on disability pensions has angered defence veterans. The Opposition also discussed it in the Lok Sabha, recently. Defence Minister Rajnath Singh said that the government would look into the matter.