Jul 6, 2019

Why disability pension tax upsets veterans

Indian Military Veterans

Why disability pension tax upsets veterans

The notification created an uproar among veterans who called it against the interests of the armed forces personnel.


 The Opposition raised the matter in Lok Sabha on June 28, where Defence Minister Rajnath Singh said the government would look into these changes.The controversy over the Finance Ministry’s decision to tax the disability pension of armed forces personnel, which had been criticised by veterans, took a surprising turn on Tuesday when Finance Minister Nirmala Sitharaman made public an unsigned note that showed it was done on the recommendation of Army Headquarters. The Army note was put out on Twitter by her office, along with a message from her calling it the “response of the Armed Forces on the issue of taxability of disability pension”.
What govt notified
In a notification dated June 24, the Central Board of Direct Taxes (CBDT) under the Finance Ministry had said that “such tax exemption 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”.
This created an uproar among veterans who called it against the interests of the armed forces personnel. The Opposition raised the matter in Lok Sabha on June 28, where Defence Minister Rajnath Singh said the government would look into these changes.
It eventually led to the posting of the Army note by Sitharaman. The note says certain “unscrupulous personnel” have found leverage in the existing system for seeking financial gains through their disabilities. The Army, it says, is concerned about personnel who are boarded out because of disability and need additional financial support. It states that the broad-banding and higher compensation awarded for disability with tax exemption has over the years led to rise in personnel seeking disability, even for lifestyle diseases.
“There should be no segregation amongst genuinely disabled personnel. At the same time, 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, wherever necessitated,” the note added.
Arguing that remuneration alone cannot compensate for the disabilities of those injured in battle, the note said the service must continue to provide them necessary support during service and after superannuation. “This aspect is being exploited by unscrupulous personnel, who have gained from disability benefits provided to disabled soldiers,” the note said. The note ends stating that the trend “if not checked at this stage, is a cause for worry”, as the Army cannot have large number of personnel with “medical disabilities in the rank and file, when the security challenge to the nation are on the rise”.
The other kind of disability
Disability benefits are of two kinds, both permissible under the rules: war injury pension attributable to operational service, and normal disability pension for any disability. The latter includes the so-called ‘lifestyle diseases’ which can be attributable to or aggravated by stress and strain of service, as entitled under the rules.
While the Army note dismisses the latter as not being favourable to the service, the effect of the stress of military service on a soldier’s health is a universally recognised phenomenon. Lawyer and expert in veteran affairs, Navdeep Singh, says that “disability rules in India and other democracies are balanced and work on the presumption of a military service-disability connection”.
His contention is based on peer-reviewed research in other democracies that have shown a direct linkage between military service and so-called lifestyle diseases. These include hypertension, cardiovascular problems and diabetes; these militaries seek to make the lives of their troops more comfortable — as seen in rising payouts for their loss of health. Research also shows a connection between military service and PTSD.
Singh, author of Maimed by the System and a member of the expert committee formed on veterans’ issues by Defence Minister Manohar Parrikar, wrote on Twitter that the Army’s note “not only berates persons with disabilities but is also contrary to rules on the subject, contemptuous to Court rulings, disrespectful of Commissions and Committees which have examined this and against the stated position of the government”. He argued that the government should not have taken cognisance of the note as “it unnecessarily creates doubts in the minds of well-meaning personalities”.
Other military veterans have a more emotional response, terming the Army note “unbelievable” and “utterly shocking”. They argue that if there is a misuse of certain provision, the Army is entitled to take suitable action to prevent that, including disciplinary action against those faking disability instead of punishing everyone

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