Revisiting tax on disability pension: Defence Minister
New Delhi, July 8
Days after a furore over taxing disability pensions, Defence Minister Rajnath Singh today assured that the government was rethinking its notification about doing away with tax benefits to veterans, who are given disability pension but had not been boarded out or continued in service.
Singh told the Rajya Sabha that “no soldier with a disability will be inconvenienced”. This comes just days after Finance Minister Nirmala Sitharaman tweeted a note from the Army to justify the taxing of disability pensions.
“A clarification has been sought from the Central Board of Direct Taxes (CBDT) and the issue is being re-examined by the ministry,” Singh said, while answering a question raised in the Upper House.
The CBDT had on June 24 issued a circular, saying disability pension would be taxed if the soldier had served his full term with the armed forces — Navy, Army and Indian Air Force.
The circular had said only those “invalidated” from service would continue to get tax benefits. The order, allegedly to stop pension misuse, has annoyed 25 lakh veterans and serving soldiers.