Disability pension to retired army employee

Yes, disability pension given to army personells is tax-exempt under income tax.

INSTRUCITON NO 2/2002   F. No. 200/51/99-ITA                                                            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 14thJanuary, 1970 [F.No.34/3/68-IT(A.I)   3.      The matter has been re-examined in the Board and It has been decided  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. 4.       This may be brought to the notice of all the officers working under your charge. 

Yours faithfully  
 

Sabse pahele me upper wale se dua karunga ki Aapko mujse bhi jyada kamyabi bakshe.

Me bhi aap hi ki tarha ek Insan hu, aur jo kuch bhi ban paya hu woh upper wale ki dua aur aapni mehnat se. Sachche dil se mehnat karte jao, aur hamesha aageki socho.

Don't say you can't. Just repeat  'I will try & try, and I will succeed'. .... Me imandarise kahta hu (due to present circumstances) aajse 50 sal ke bad (my practical life), aap merese kaee jyada knowledgeable person hoge.... Good Luck & God Bless......

"Purchase of land on 31-10-2012 for 550000 and sale value on 07-11-2017 is rs 352000 what will be the treatment of section 50C ??"

Here, where is the question of applicability of section 50C?

What is Section 50C?

• With effect from 1st April 2003 i.e. from A.Y. 2003-04, Section 50C of Income Tax Act, 1961 states that if the value stated in the instrument of transfer is less than the valuation adopted or assessed or assessable by the stamp duty authorities, such valuation of the stamp duty authorities will be considered as the sale consideration for the purpose of computation of capital gains arising on transfer of land or building or both. Hereby this provisions apply to transfer for a consideration of land or building if only held as capital asset at the time of such transfer. Thus, transactions of flats, shops, galas, factories being parts of buildings, etc. are covered by the provisions of section 50C.
• Value “assessable” by the stamp valuation authority basically means that the price which would have been adopted/assessed had the transaction been referred to such valuation authority for the payment of stamp duty., as per amendment in 2009. Prior to this it had been held in many cases that the transfer of property must first be registered for the purpose of payment of stamp duty. Now, by virtue, of this amendment, the income-tax authorities are free to refer the property to stamp valuation authority irrespective of whether the same has been registered for stamp duty purposes or not.

• On receipt of valuation report from the Valuation Officer, the Assessing Officer has to compare the fair market value as determined by the Valuation Officer with the valuation done by the Stamp Valuation Authorities under the Stamp Duty Act and with the apparent sale consideration shown by the assessee in the sale deed;
• Where valuation done by the Valuation Officer is more than the valuation done by the Stamp Valuation Authorities (SVA) then valuation done by the SVA would be taken as full value of consideration and capital gains will be calculated accordingly;
• If valuation done by the Valuation Officer is less than the valuation done by the SVA then valuation done by the Valuation Officer would be adopted as full value of consideration as against the apparent consideration shown by the assessee or the valuation done by the SVA and capital gains be calculated accordingly;
• lf valuation done by the Valuation Officer is less than the valuation done by the SVA as well as sale consideration shown by the assessee in the sale deed then apparent consideration shown in the sale deed would alone be accepted as full value of consideration and capital gains be calculated accordingly, i.e. as shown by the assessee.

Don't consider sec. 43CA here, its for builders & developers, considering the sell of 'stock in trade'.

For sell/transfer of capital assets as above, if SDV is 5.50 lakhs, and the purchaser has paid say, 3.50 lakhs..... the AO can add  balance 2 lakhs as capital gains to seller..... and on other hand similar amount is added to purchaser under IFOS u/s. 56(2)(x).  (here recent amendment in the sec. not considered)

Here, the sections are applicable to both simultaneously and are independent to each other, and hence both are at loss. (To curb such activity its  taxed at both end)

SD Value 5.50 lakh....

Transacttion carried out at 3.52 L

Stamp duty paid on 5.50 lakhs transaction value.

Seller received 3.50 lakhs by banking mode.

Balance amount is deemed to be received by unaccounted cash.

Seller may declare capital gains based on 3.52 L, which is not accepted by AO and adds cash amount of 2 lakhs for calculating capital gains, based on sell value as 5.50L (sec. 50C triggers)

Buyer paid 3.52 L by cheque/DD and as per sec. 56(2)(x), got the benefit of 2 lakhs (by paying such amount less than SDV). This benefit is treated as IFOS, and taxed accordingly over buyer.