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New Delhi
In a stinging response to the ongoing controversy over removing tax exemption to disabled soldiers, Finance Minister Nirmala Sitharaman’s office today tweeted a statement claiming it to be the “response of the armed forces on the issue of taxability of disability pensions”.
Later, the official Twitter handle of the Indian Army also tweeted the same statement. Sources confirmed it was an official statement of the Army Headquarters.
The statement says some people have been misusing the facility given to disabled soldiers as their pensions are exempt from income tax. It says: “Those who have found leverages in the existing system for seeking financial gains through their disabilities need to be scrutinised and taken to task, where ever necessitated… Over the years, there has been rise in personnel seeking disability even for life style diseases. The trend, if not checked at this stage, is a cause of worry, as the Army cannot have large number of personnel with medical disabilities in the rank and file.”
Sitharaman was the Defence Minister in the first term of the Narendra Modi government.
In June, the government had come out with a circular saying income tax exemption will be allowed to only those disabled soldiers who have been invalidated or incapacitated during military service.
At present, income tax exemption is claimed by all soldiers who get a disability pension. The new circular issued by the Central Board of Direct Taxes yesterday has clarified that tax exemption for disability pension will be “available only to armed forces personnel who have been invalidated from service on account of bodily disability attributable to or aggravated by such service and not to personnel who have been retired on superannuation or otherwise”.
In other words, those who retire after full service with some disability will not get income tax exemption. There have been instances of income tax exemption being availed by those who retired with disability.
The Armed forces personnel who acquire disabilities due to various factors of service get disability pension, which is calculated as per the degree of disability a person faces. For example, a person who lost two fingers of a hand due to bullet hit will get a lesser pension than a person who has lost a leg or an eye.
‘A Cause of Worry’
Those who have found leverages in the existing system for seeking financial gains through their disabilities need to be scrutinised and taken to task… Over the years, there has been rise in personnel seeking disability even for life style diseases. The trend, if not checked, is a cause of worry.
