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S. RAVICHANDRAN (Finance Professional) (151 Points)

17 July 2018

SIR

ONE OF MY CLIENT IS EX SERVICE MAN. THE ASST. YEAR 2018-19, HE RECEIVED DISABLED PENSION AND AREARS FOR DISABLEMENT PENSION. AS PER THE IT ACT THE SAME HAS BEEN EXEMPTED OR NOT. IF EXEMPTED WHICH ITR FORM TO SELECT E FILE FOR THE AY 2018-19 TO CLAIM EXEMPTION. AND ALSO INFORM SECTION OF THE IT ACT.

REGARDS

S. RAVICHANDRAN

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 17 July 2018

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

Sd/x----

===============================================

Income Tax Exemption - IT Exemption on complete Disability pension

The entire pension, that is, service element (service pension) and disability element of disability pensioners is exempted from the purview of Income Tax. Disability Pension comprises of two elements, service element that is granted in terms of the length of service (subject to a minimum amount in cases where service rendered is less than pensionable service), and disability element which is granted in terms of the percentage of disability. There is no minimum qualifying service prescribed for service element or disability element, hence even if a person has a single day of service, he or she is entitled to disability pension. For individuals who have completed their minimum qualifying service for pension, their service pension becomes the service element for purposes of disability pension. Both elements are exempted from Income Tax and so are the arrears of both elements. The same has been clarified by the Ministry of Finance, Department of Revenue vide Instruction No 2/2001 dated 02 July 2001 and Instruction No 136 dated 14 January 1970, both of which can be viewed below.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 17 July 2018

Instruction No 136
F.No. 34/3/68-IT(AI)
Govt of India
Central Board of Direct Taxes
New Delhi, dated the 14th Jan 1970

From :Shri S N Nautial
Secretary, CBDT

To:
All Commissioners of Income Tax

Subject : Exemption – Service and Disability Element of Disability Pension granted to a disabled officer of the Indian Army – whether exempted from Income Tax.

Sir,

1.Reference is invited to the Board’s Letter F No 42/9/59-IT(AI), dated the 5th Sept 1960 on the above subject wherein it was mentioned that in the cases falling under Item (29) of Finance Deptt. Notification No 878-F (Income Tax) dated 21-3-1922, the ‘disability element’ of the disability pension received by an officer of the Army will only be exempted from tax and that the ‘service element’ will be subjected to tax.

2. On reconsideration of the matter, in consultation with the Ministry of Law, the board are advised that item 29 of the notification does not differentiate between types of pensions. Accordingly in the cases falling under item 29 of the above notification, entire disability pension will be exempted from income-tax.

3. The above instructions may be brought to the notice of all assessing officers in your charge

Yours faithfully,

Sd/-
(S N Nautial)
Secretary CBDT

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 17 July 2018

Instruction No 2/ 2001

F.No. 200/51/99-ITA.I
Govt of India
Ministry of Finance
Deptt of Revenue
Central Board of Direct Taxes
New Delhi, the 2nd July, 2001

To :
All Chief Commissioners of Income-Tax
All Directors General of Income-Tax

Subject : Exemption from Income Tax to disability pension, i.e., “disability element” and “service element” of a disabled officer of the Indian Armed Forces – Instructions regarding
Sir,

1.References have been received in the Board regarding exemption from Income Tax to disability pension, i.e., “disability element” and “service element” of a disabled officer of the Indian Armed Forces.

2. It appears that field formations in certain cases are not uniformly allowing disability pension in spite of Board’s Instruction No 136 dated 14th January 1970 (F No 34/3/68-II(AI) ).

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 Armed Forces continues to be exempt from Income Tax.

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

Yours faithfully

Sd/-
(B L Sahu)
OSD (ITA-I)

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 17 July 2018

Refer page 58 ... clause 88.3 from

Defence Pension Payment Instructions 2013

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 17 July 2018

Col. K. S. Chaudhary

Respondent: Ms. Gunjan Varshney CPIO DCIT

The applicant stated that he is retired Col. from the army and is physically handicapped and as per Government regulation his disability pension is totally free of tax, however, the bank which disburses the pension is deducting TDS. He informed that he has made several representations to the Ministry of Finance but no instructions have been issued by them to banks to stop deducting TDS. He emphasized that both service and disability elements are exempt from income tax. The CPIO agreed and stated that they have issued instructions to their field officers on 14/01/1970 and reiterated the same vide circulars dated 06/05/2000 & 02/07/2001 intimating that service & disability element are both exempt from tax. She submitted that in case of retired disabled defence officers it is for the controller of defence accounts to issue instructions to the respective pension disbursing banks.

Decision notice:

The CPIO is directed to write a communication to the CDA requesting to issue appropriate instructions to pension disbursing banks not to deduct TDS on service & disability element of disability pension of retired defence personnel. A copy of the communication should be endorsed to the applicant.

The appeal is disposed of accordingly.

https://indiankanoon.org/doc/134898382/

RAJA P M ("Do the Right Thing...!!!") (127133 Points)
Replied 17 July 2018

My Dear Sir.,

Very useful details.... Thank You for the details.

A Person retired in Jun-17 and get some retirement benefits...
Also he get Rs 7 Lakhs for EL, Gratuity and Some other benifts. TDS deducted this. amount...

The benefits is taxable or exempted?
If exempted then how to get refund for the TDS amount...?

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 17 July 2018

Not fully exempted.......... each benefit over and above its exemption limits are taxable...

So, have to calculate each separately......

RAJA P M ("Do the Right Thing...!!!") (127133 Points)
Replied 18 July 2018

Respected Sir.,

Total receipts like as Following

SALARY (MAR-JUN 17)		285562
EL 240 DAYS (588496-300000)	288496	288496
LEAVE ON PRIVATE AFFAIRS	220686	220686
WAGE REVISION ARREARS	66470	0
D.A ARREARS	2218	2218
TOTAL		796,962

Less :

HRA - Rs. 12800

FSFS & SPF - Rs. 825

Sec 80 D - Rs. 720 = (12800 + 825 + 720) = 14345

After Deductions Total = Rs. 782617

TDS Deducted Rs. 71,250

(Also he have some interest from FD, MF and Deductions...)

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 18 July 2018

The maximum exemption available over leave encashment of Rs. 3,00,000/- has duly been considered in the calculation.

Leave on private affairs is taxable perquisite......

Arrears of wage are not taxed....

The calculation is OK... No more deduction (other than deduction under Chapter VIA) possible now.

1 Like

RAJA P M ("Do the Right Thing...!!!") (127133 Points)
Replied 18 July 2018

Sir,

As per above Calculation no way for claim Refund for TDS amounts...

Am I right?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 18 July 2018

In this calculation deduction like 80C.. lic premium etc. are not considered (as said earlier, deduction under chapter VIA)...... that may reduce tax liability...... so just check that.

RAJA P M ("Do the Right Thing...!!!") (127133 Points)
Replied 18 July 2018

Originally posted by : Dhirajlal Rambhia
	In this calculation deduction like 80C.. lic premium etc. are not considered (as said earlier, deduction under chapter VIA)...... that may reduce tax liability...... so just check that.

Okay... Thank You Sir...

1 Like

S. RAVICHANDRAN (Finance Professional) (151 Points)
Replied 02 August 2018

SIRS

BY CLERICAL MISTAKE WE HAVE MENTIONED A ELIGIBILE ITC AS Rs.3.01 LACS INSTEAD OF ACTUAL Rs.1.84 LACS WHILE FILING THE GSTR-3B TABLE NO.4 ELIGIBILE ITC FOR THE MONTH OF APRIL 2018. NOW THE MISTAKE WAS FOUND.

HENCE, I HEREBY REQUEST YOU TO KINDLY CLARIFY HOW TO RECTIFY THIS MISTAKE.

REGARDS
S. RAVICHANDRAN