New Delhi: The finance ministry has ruled that the disability pension granted to military personnel who superannuates under normal circumstances will be taxable. The pension will be non-taxable only to persons who have retired due to any kind of disability, added the defence sources.Also Read - 7th Pay Commission Latest News: Will Centre Hike Dearness Allowance From September? Big Announcement Expected Tomorrow

Notably, a circular issued by the Central Board of Direct Taxes (CBDT) on Monday clarified that the ‘income tax exemption’ which is available for the Army, Navy and IAF personnel is not available for those who were retired on superannuation or otherwise. The Finance Ministry circular dated June 24 stated, “Tax exemption will be available to armed forces personnel who have been invalided from the service on the account of bodily disability attributable to or aggravated by such service and not to personnel who have been retired or superannuated or otherwise.” Also Read - GST Council Special Session To Be Convened To Discuss Compensation-Related Issues: Sitharaman

Military officers reportedly said that the aim of this taxation is to reduce the benefits that are entitled to the armed forces. This is for the first time that the disability pension which is granted besides the normal pension given to superannuating personnel as per rank is subject to taxation. Notably, the circular does not mention the date from which the order becomes effective. A military officer was quoted by Times of India as saying, “The finance ministry and CBDT contend they are just clarifying or interpreting the existing rules based on some representations they have received…the move is clearly mischievous.” Also Read - Nirmala Sitharaman Meets Infosys Officials, Reviews Tech Glitches On New I-T e-Filing Portal

In the month of January, the Defence Ministry had tweeted, “With approval from Smt @nsitharaman, it has been decided that the disability/war injury pension, special family pension and liberalised family pension shall be minimum Rs 18,000 per month for Defence Forces pensioners/family pensioners, with effect from 1/1/2016.”

Armed forces personnel who suffer any kind of disability due to their service receive a separate disability pension. The amount depends on their rank and the kind of disability.

(With agency inputs)