Disability Pension

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CA. Vinod (Querist)
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17 August 2010 All experts,

Indian Army retires its Lt Colonel at the
age of 43, due to injuries, and start
paying him Diability Pension.
Whether this pension is Tax Free?
If yes, then quote the sections & provisions.
Also give your opinion on tax treament
of the same.

Regards.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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17 August 2010

INSTRUCITON NO 2/2002

F. No. 200/51/99-ITAJ
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi. The 2nd July, 2002.

To,

All the Chief Commissioners of Income - tax,
All the Directors General of Income-tax,

SUBJECT: Exemption from income tax to disability pension “disability element” and “ service element” of a disabled officer of the Indian Armed Forces – Instructions

Sir,

1. Reference have been received in the Board regarding exemptions income tax to disability pension, i.e. “ disability element” and “service element” of a disable officer of the Indian Armed Forces.

2. It appears that field formations in certain cases are not unitary allowing disability pension in spite of Boards – Instruction No 136 dated 14th January, 1970 [F.No.34/3/68-IT(A.I)

3. The matter has been re-examined in the Board and It has been decet to reiterate that the entire disability pension, i.e. “disability element” and “service element” of a disabled officer of the Indian Army Forces contains be exempt from income tax.

3. This may be brought to the notice of all the officers working under

Yours faithfully

Pl read the above and decide accordingly.

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