Army, veterans divided over Centre's decision to tax disability pension

The Army had backed the Centre's decision to check the misuse of disability pension

Army rep-ADGPI Representational image | Facebook account of Indian Army's Additional Directorate General of Public Information

An alarming increase in the number of beneficiaries of disability pension in the recent years has forced the Army headquarters to take remedial measures to check its misuse.

In a letter to the Union finance ministry, the headquarters has urged the Centre to tax the disability pension beneficiaries. “It has been observed that the number of military personnel taking benefit of the disability pension was much high. And to check misuse of it, the headquarters has initiated several steps," said an official while adding that taxing would dissuade people not to adopt wrong methods to get money benefits.

It all started after the hike in disability pension by the 6th Pay Commission in 2006. And the 7th Pay Commission had come with an observation that there was huge jump in disability pension cases, especially among the senior ranks.

In a notification dated June 24, the Central Board of Direct Taxes (CBDT) under the Union finance ministry said that “such tax exemption will be available only to armed forces personnel who have been invalidated from service on account of bodily disability attributable to or aggravated by such service and not to the personnel who have been retired on superannuation or otherwise.”

But after facing growing criticism from the military fraternity on the sensitive issue, Finance Minister Nirmala Sitharaman on Tuesday defended her ministry's decision and put out the onus for the initiative on the armed forces itself.

While putting an internal unsigned note on twitter, Sitharaman’s office stated the “response of the Armed Forces on the issue of taxability of disability pension states that the disability pension attributable to service conditions was being exploited.”

The note also stated that only remuneration alone cannot compensate for the disabilities of those injured in battle, it must continue to provide them necessary support during service and post their superannuation. “This aspect is being exploited by those unscrupulous personnel, who have gained from disability benefits provided by the government to disabled soldiers,” the note said.

But the issue has further upset the military fraternity, when the Army headquarters official came out to back the decision to tax disability benefits. In a series of tweets, the Army criticised "personnel seeking disability, even for lifestyle diseases" for tax-exemption purposes and said it highlighted a worrying trend in the face of “security challenges to the nation”.

“Over the years broad-banding and compensation awarded for disability with income tax exemption, have led to a rise in personnel seeking disability, even for lifestyle diseases. The trend is worrisome and that too when the security challenges to the nation are on the rise," the Army's additonal director general of public information (ADGPI) said in a tweet.

Veterans has come down heavily on the Army tweets. Retired Lt General Prakash Katoch reacted sharply against Indian Army's tweet saying, “Stupid cover up for pussyfooting and doing down own soldiers”.

“ADGPI at its worst possible. Campaigning against its own,” remarked retired Lt General Syed Ata Hasnain.

Retired Major Navdeep, an expert on legal matters, said, “The @PMOIndia has shown extreme sensitivity towards Divyangs. Mr Parrikar made sure disabled soldiers, including those suffering from regular ailments, were given due comfort. Mr @rajnathsingh has also been very caring. Today's developments are saddening.”

“Actually I'm too benumbed to even react. This note goes against rules, judgments of the Supreme Court, medical science, and various reports of commissions and committees on the subject. Just too shocked. Unbelievable. Totally unbelievable," Navdeep added.

Alleged misuse of disability pension was highlighted in December 2014 by the Director General Armed Forces Medical Services (AFMS) in a letter to then Defence Secretary R.K. Mathur.

Lt Gen B.K. Chopra, DG DFMS in the letter dated December 16, 2014 stated that, “The trend of senior officers seeking to be placed in low medical classification at the fag end of their career in the armed forces or leaving service in SHAPE-1, and preferring post discharge claims soon thereafter needs to be curbed to prevent the inevitable epidemic of such cases in the future.”