Exemption of pension to disabled armed forces personnel available to all ranks-CBDT

Exemption of pension granted to disabled armed forces personnel available to all ranks but not to those retired on superannuation or otherwise

CIRCULAR No. 13/ 2019

F. No. 173/250/2019-ITA-1
Government of India
Ministry of Finance
Department  of  Revenue
Central Board of Direct Taxes

North Block, New Delhi the 24th June, 2019

Subject: Exemption of service element and disability element of disability  pension granted to disabled personnel of armed forces who have been invalided on account of disability attributable to or aggravated by such service–reg.

Under the existing provisions  of clause (i) of sub-section 2 of section 297 of the Income­ tax Act, 1961 (‘Act’) any notification issued under sub-section (1) of section 60 or section 60A of the Indian Income-Tax Act, 1922 (now repealed) and in force immediately before the commencement of the Act shall continue to be in force to the extent to which no provision has been made under the Act. Previously, in exercise of powers conferred under section 60 of  the Indian Income-Tax Act, 1922, vide Notification no. 878 F dated  21.03.1922, it was ordered at para 19 that “pensions granted to members abcaus.in of His Majesty’s naval, military or air forces who have been invalided for naval, military or air force service on account of bodily disability attributable to or aggravated by such service would be exempt from tax under the Indian Income ­ Tax Act, 1922″.

2. In furtherance to the above, instruction 136/1970 dated 14.01.1970 in F.No. 34/3/68 IT(AI) and instruction no. 2/2001 dated 02.07.2001 in F.No. 200/51/99-ITA-1 have been issued to clarify that the entire disability pension, i.e. “disability  clement” and “service clement” of a disabled officer of the Indian Armed Forces continues to be exempt from income tax under the Income-tax Act, 1961.

3. Representations have been received, requesting to clarify whether the exemption is applicable only to the disabled officers of Armed Forces or all disabled Armed Forces Personnel (i.e. including officers and Jawans). Representations  have also been  received  to clarify as to whether the Income Tax exemption would be limited to only such disabled Armed Forces Personnel who arc 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.

4. The matter has been examined in the The notification no. 878-F dated 21.03.1922, provides income tax exemption to all members of Armed Forces who have been invalided for naval, military or air force service on account of bodily disability attributable to abcaus.in or aggravated by such service. Thus, income-tax exemption under above clause would  be available to all armed forces personnel (irrespective of rank) who have been invalided for such service on account of bodily disability attributable to or aggravated by such service.

5. Further, such tax exemption will be available only to armed forces personnel who have been invalided from service on account of bodily disability attributable lo or aggravated by such service and not to personnel who have been retired on superannuation or otherwise.

-sd –

(Rajarajeswari  R.)
Under Secretary to the Government of India

Copy to:–

1. PS to FM/OSD to FM/ PS to MaS (R) /  OSD to MOS (R )
2. PPS to Secretary (Revenue)
3. The Chairperson,  Members  and   all  other  officers  in  CBDT of  the  rank  of  Under Secretary and above
4. All Pr. Chief Commissioners/ Pr. Director General of Income-tax / Chief Commissioner of Income tax (Exemptions) – with a request to circulate amongst all officers in their regions;  charges.

5. CIT(M&TP), CBDT and Official spokesperson of CBDT
6. The Additional Director General (PR & PP), New Delhi.
7. ITCC Division of CBDT
8. Database Cell – for placing it on irsofficcrsonline.gov.in
9. DIT (S) -4 / Web manager for placing it on incometaxindia.gov.in
10. The Guard File

Under Secretary to  the Government of India