Exemption of Defence pension for reemployed Ex servi

This discussion clarifies the tax exemption status of defence pensions for ex-servicemen reemployed in Public Sector Undertakings (PSUs). Generally, defence pensions are not exempt from income tax unless the recipient is a gallantry award winner, such as a Param Vir Chakra, Maha Vir Chakra, Vir Chakra, or Sena Medal awarded for acts of courage. If you are receiving a pension and working in a PSU, you must declare your pension income and compute your tax liability, considering deductions available under Chapter VI-A if your salary exceeds the basic exemption limit.