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
14th January, 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-----
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Income Tax Exemption - IT Exemption on complete Disability pension
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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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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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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.
Yours faithfully Sd/- (B L Sahu) OSD (ITA-I) ================================================ (Source Via e-mail from Col Ajit Singh Rana, Retd. |
what is service element.. is service element is service pension
ReplyDeleteYes, Service element is service pension
ReplyDeletePls let us know under which section is this applicable. This will help us while filing returns.
ReplyDeleteunder which section of income tax it is applicable . Where can we show the exemption ?
ReplyDeleteSir, did u receive the answer from any source ?
DeleteNo one is able to clarify the section or column of ITR WHERE WE CAN FILL UP THIS EXEMT AMOUNT. KINDLY CLARIFY THIS.
ReplyDeleteThis letter is only applicable for officers. Is there any mention of JCOs and OR who are in receipt of disability pension. May be in near future it may affect JCOs and OR consequent to 7th pay commission and OROP.
ReplyDeleteAs far as this rule goes, the word 'officer' means any person who has been in military service. The others are also Non Commissioned Officers, Junior Commissioned Officers etc.,
DeleteI think the policy has changed now. The rebate on Income Tax is applicable only when an officer is sent out of service on disability grounds. This is the new policy received by SBI pension section, Mumbai.
ReplyDeleteHPS Sodhi. I am a disabled exs and TDS was deduected from my pen Aug 16. I request you if you have a copy new policy order of dis pen (SBI Pension Mumbai), kindly sent to my mail address. Email reshma_renjith@yahoo.co.in. ph : 9442577873 from Radhakrishnan, Pondicherry
DeleteSBI does not have any Govt of India instructions on this. This is their internal communication to deduct TDS on those who have not been boarded out. May be we will have to claim refund in IT return
DeleteThis is now further clarified in the minutes of the bankers conclave published at iafpensioners.nic.in
DeleteSuddenly, income tax stand deducted by SBI from disability pension recd in month of august 2016. What could be the reason,? Any body in knowledge of it pl.
ReplyDeleteSuddenly, income tax stand deducted by SBI from disability pension recd in month of august 2016. What could be the reason,? Any body in knowledge of it pl.
ReplyDeletePresently SBI has ask me for application to submit for exemption of TDS however they have neither shared any authority nor are the aware. Presently I have submitted the above 2001 instruction. waiting for the response
ReplyDeletePresently SBI has ask me for application to submit for exemption of TDS however they have neither shared any authority nor are the aware. Presently I have submitted the above 2001 instruction. waiting for the response
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThis comment has been removed by the author.
ReplyDeletehttp://taxworry.com/disability-pension-to-armed-forces-fully-exempt-from-tax-tds/
Deletehttp://indiantaxblog.blogspot.in/2016/05/important-changes-to-income-tax-rules.html
ReplyDeleteSir
ReplyDeletePlease refer to Para No. 88.1 , 88.2 and 88.3 of Defence Pension Payment Instructions 2013 issued by PCDA, Allahabad to All PDAs except Post offices. In these paras it is clarified that Diability pension (both Service element and disability element) is exempted from Income tax, Pl down load from internet and show to thh banks.
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DeleteHi Sir
ReplyDeleteGone through all above comments and articles, but still not able to find found, how to claim the same in ITR 1. Anyone has any clue about that.
Disability pension & Disability element both are tax exemption for officers and is there any provision for other ranks?
ReplyDeleteIs element means full pension basic + da.
ReplyDeleteSir I invaildout army mujhe service element pension milti hai d element Nana mere service element pension par bank tds cut rahi hai keya service element pension par tds lagta hai
ReplyDeleteSir me disability pensioner hu kya mera tds cut hona chahiye. or kya slab in ki.our bank ne mera dis pen ppo lost kr diya tha our meri dis.pen. band ho gai thi. ab 12 saal bad lagu hui ha .2017 me mera 20000 tds cut hua tha kya refund ho skta bata ye no.7051057551
ReplyDeleteUnder which section Disability pension should be shown while filling ITR
ReplyDelete