Ex-Servicemen Move SC over Income Tax on Disability Pension

FAUJI INDIA| UPDATED

Staff Correspondent (from August 2019 issue)

Sixty-four Ex-Servicemen have approached the Supreme Court against a circular from the Central Board of Direct Taxes (CBDT) that withdrew the Income Tax (IT) exemption on the Disability Pension drawn by those who retire after full service (or superannuation). The Veterans include 54 officers and 10 Jawans. According to Col IS Singh (Retd), counsel for the petitioners, the case is likely to be heard next week.

The June 24, 2019 circular said: “Further, such tax exemption will be available only to armed forces personnel who have been invalided out of service and not to personnel who have been retired on superannuation or otherwise.” The circular has been signed by Rajarajeswari R., an Under Secretary level officer in the Department of Revenue. Fauji India is in possession of the circular. This means, those nearing the end of their full tenure, or taking a Pre-Mature Retirement (PMR) and are declared eligible for Disability Pension by medical boards will have to pay Income Tax. The circular however does not clarify when the new rule will come into effect.

The matter became murkier following Finance Minister Nirmala Sitharaman’s office tweeting a letter from the Army headquarters which said how undeserving personnel have wrongfully claimed Disability Pension, indicating how the army was acting against its own interest. The Indian Army soon followed by officially support the stand. It tweeted: “Indian Army is concerned for all personnel who are invalidated out of service in combat conditions or otherwise, and need additional support and discourages those who seek financial gains through their disabilities.”

This enraged Veterans further who took to social media criticizing the army for campaigning against it’s own. The Army said that over the years, broad-banding and the compensation awarded for disability with income tax exemption had led to a rise in the number of personnel claiming disability even for lifestyle diseases.

Disability Pension has been a sore issue amongst the Indian military fraternity, with the primary complain being the government challenging claims won by serving and retired soldiers in the Armed Forces Tribunals (AFT) in higher courts. Last year, the revelation on social media about the MoD having spent Rs 47 crore on lawyers for challenging such cases had triggered an outrage amongst the Veteran fraternity, which became a symbol of the bureaucratic insensitivity and apathy towards military personnel management issues.

‘Fauji India’, in its November 2018 issue, had adopted ‘Disabled Soldiers versus MoD’ as its main theme. Veterans had highlighted appalling stories of the daunting red-tape and obstructionism that Faujis have to battle in securing their rightful dues from the MoD, which is quite sadly often aided by some within the military fraternity itself, betraying their own.

This is besides the repertoire of let downs to the military on various pension, pay and service demands since the first term of the NDA government. This began with the downgradation in the 7^th Central Pay Commission (CPC); Giving only 90% OROP; Unleashing the Delhi Police to lathi-charge aged Veterans at Jantar Mantar; Declining an enhanced Military Service Pay (MSP) to around 1.12 lakh Junior Commissioned Officers (JCOs); Withdrawing the education allowance for wards of military personnel (restored); Withdrawing free rations (restored); Asking the army to clean tourist spots as a part of the Swachch Bharat campaign; Not acting against cabinet minister Nitin Gadkari despite him publicly mouthing off on the Indian Navy; Allocating a defence budget so low in 2018 that it couldn’t even pay for the Capital Acquisitions, and; Withholding Non-Functional Upgrade (NFU) for the Armed Forces.

In February this year, obviously with an eye on the polls and in a bid to secure the military vote, the MoD declared a minimum War Injury/Disability Pension of Rs 18, 000, which would be implemented with retrospective effect from January 1, 2016. However, such small tokenisms are not sufficient to address the long running demands of the military, which might eventually cost the nation a war.