Disability pension of all ranks of armed forces to be exempt from Income Tax

The Centre on Monday clarified that disability pension of all armed forces irrespective of rank shall continue to be exempt from income tax.

The tax exemption will be only for personnel who have been invalided from naval, military or air force 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, a circular issued by the Central Board of Direct Taxes on June 24 clarified.

Moreover, the disability pension exempt under The Income-tax Act, 1961, will be the entire disability pension including service element and disability element.