Fresh twist on disability pension controversy

The controversy on taxing the disability pension for soldiers took a new turn on Tuesday with Union Finance Minister Nirmala Sitharaman releasing an unsigned note from the Army in which the force argued in favour of finding out and penalising the rotten apples who sought tax-free disability pension even due to lifestyle diseases.

“The broad-banding and higher compensation awarded for disability with tax exemption has over the years led to a rise in personnel seeking disability, even for lifestyle diseases. The trend, if not checked at this stage, is a cause for worry as Army cannot have a large number of personnel with medical disabilities in the rank and file, when the security challenges to the nation are on the rise,” says the note released by Nirmala on Twitter.

While the Army has no qualms for people like Maj Gen Ian Cardozo (retd), who during the 1971 war amputated his leg with his Khukri, the forces said, “those who have found the leverages in the existing system for seeking financial gains through their disabilities, needed to be scrutinised and taken to task where ever necessitated.”

The controversy began with a June 24 circular from the Central Board of Direct Tax in which the CBDT stated that income tax exemption would be limited to only such disabled armed forces personnel who are invalided out of service due to disability attributable to or aggravated by military service condition or to even those who retire after full service with some disability.”

Even though there are instances of misuse of the existing provisions by top officers, the new move angered the armed forces as disability pensions for superannuating personal have never been taxed before.

As the murmurs of protests spread in the community, Defence Minister Rajnath Singh told the Lok Sabha last week that he would look into the matter.

The note shared by Nirmala, who held the defence portfolio in the previous government, however, failed to silence the critics, who argued that such exemptions are permitted under the existing rules.

“There are two kinds of disability benefits, both allowed under the rules — war injury pension for disabilities attributable to operational service (like Maj Gen Cardozo) and normal disability pension for any disability (including those branded lifestyle diseases) that can be attributable to, or aggravated by stress and strain of the service — fully entitled under the rules. This insensitive note demonises the latter,” said Maj Navdeep Singh, a retired Army officer, who is now a practising lawyer in Chandigarh.