Tax On Disability Pension Grossly Unfair Punishment: Army Veterans

Several senior retired officers felt that a tax on disability pension was too broad and would punish genuine cases.

The Finance Ministry’s decision to impose tax on disability pension has led to a heated debate among serving and retired armed forces officers and jawans. 

(Photo: PTI)

Editor: Purnendu Pritam

“There has been immense heartburn among the veteran community and even the serving community on such an action”

Maj. Gen (Retd) Harsha Kakar

A fierce debate has been raging among armed forces veterans that refuses to be quelled.

A Ministry of Finance circular issued on 24 June 2019 has announced the government’s decision to impose a tax on the disability pension given to veterans.

The circular states that disability pension for Armed Forces will now be taxed for those who have retired upon completion of service. The tax exemption will apply only to those who have been invalidated from service upon “bodily disability”.

“That means all those war heroes who have fought 1965, 1971 but served till superannuation will also be paying tax,” said Maj (Retd) DP Singh, a Kargil war veteran.

The Ministry of Finance circular on 24 June that announces a tax on disability pension.(Source: Twitter)

Point 5 spells out the eligibility for tax exemption. (Source: Twitter)

What Has Prompted This Move?

The rationale behind the move appears to be a misuse of the tax-free pension by officers and men who claim it towards the end of their service.

“It is because of the fact that over the past few years there has been a feeling, and there has been some data to substantiate this, that some soldiers or officers are misusing the system,” Lt. Gen. Satish Dua told The Quint.

“Officers and men of the service seeking disabilities in the final years of the service... well if this was the case this should’ve been dealt in a different way rather than take an across-the-board decision.”  

Maj. Gen (Retd) Harsha Kakar

Veterans The Quint spoke with were of the view that the tax imposition was overbroad and needed to be on case-by-case basis. “Instead of checking that, we will punish en masse everybody who are genuine cases. This raises a question on their integrity which is not correct,” said Maj(Retd) DP Singh.

A Misinterpretation of ‘Lifestyle Diseases’

A major bone of contention in this case has been the manner in which disability has been interpreted. Many veterans feel that it has trivialised a range of diseases and ailments caused by the pressure in the line of duty.

Lt. Gen (Retd) Satish Dua said that disability can come under three categories.

1. It could be in war
2. Those who operated in field conditions and in combat zones
3. Lifestyle of pressure that one leads in the army

This classification negates the limited definition of disability that refers to bodily disability only.