Army backs taxing disability pension

New Delhi: The army headquarters seems to have backed the recent circular by finance ministry to tax disability pension of military personnel who retire on superannuation claiming that tax exemption provision had over the years led to rise in personnel seeking disability even for lifestyle diseases.

Union finance minister Nirmala Sitharaman on Tuesday posted a letter on the Twitter “as response of the Armed Forces on the issue of taxability of disability pension.”

The minister has remo-ved the heading and the signature on the letter. However, no response fr-om the army on such a sensitive issue can come without the nod from the army chief. The finance ministry circular had evoked a sharp reaction from the military veterans.

Last week, finance ministry in a circular had said that disability pension of only those army personnel will be tax free who had to leave service due to disability suffered while doing their duty.

However, disability pension will not be tax free for those army personnel who retired from their services on superannuation, according to the circular. This had resulted in a series of protests from many army veterans.

The letter posted by the finance minister said that disability is granted to personnel who are disabled in combat or during peace time and their disability is attributable to service conditions.

“The latter have some how exploited the weakness in the mechanism, for grant of disability pension and along with the tax exemption,” the letter  said.

The letter said that unfortunately some veterans feel that the courage and valour displayed by soldiers wounded in battle, should be compensated for their courage by mere financial remuneration. It said that such remuneration alone cannot compensate for their
disabilities.

The service must continue to provide them necessary support, through their career in the Army and post their superannuation.

“This aspect is being exploited by those unscrupulous personnel, who have gained from disability benefits provided by the government to disabled soldiers,” it said.

The letter said that those who have found the leverages in the existing system for seeking financial gains through their disabilities, need to be scrutinised and taken to task, where ever necessitated. It said that broad banding and higher compensation awarded for disability with tax exemption has over the years led to rise in personnel seeking disability, even for life style diseases.