SC notice to Centre on plea against tax on disability pension

The Supreme Court on Friday issued notice to the Centre on a petition filed by a group of armed forces veterans against a CBDT circular stating that disability pension of those who have not been invalidated out of forces due to injury would be taxed.

"Our petition on Income Tax exemption on disability pension was heard today by a bench headed by Justice UU Lalit. The court admitted our petition for hearing before August 31, 2019 and accordingly issued notice to all the respondents to file their reply in three weeks," Colonel (retd) IS Singh, the counsel for the 64 veterans, told ANI.

He said the court also directed the case to be listed after three weeks for final consideration.

The ex-servicemen have approached the apex court against a Central Board of Direct Taxes (CBDT) circular stating that disability pension of those veterans who have not been invalidated out of forces due to the injuries would be taxed.

The veterans include 54 officers and 10 jawans.

The CBDT, in its circular issued last month, had stated that "income tax exemption" would continue to be available for all Army, Navy and IAF personnel who have been "invalidated out of service on account of bodily disability attributable to or aggravated by such service".

But, it added, such tax exemption would not be available to personnel "who have been retired on superannuation or otherwise".

This, in effect, means the personnel with some disability who retire in the normal course will no longer get tax exemption on their disability pension.