SC to hear disability pension tax case: The Tribune India

Vijay Mohan

Tribune press service

Chandigarh, March 2

The Supreme Court (SC) today settled the case regarding the deduction of income tax from the disability pension of defense personnel for an urgent hearing on March 6. The case was provisionally scheduled to be heard on March 16.

A circular was sent by the Principal Controller of Defense Accounts (Pensions) to various banks asking them to deduct the income tax from the pensions of disabled soldiers. As a result, meager amounts were credited to their accounts as a pension for the month of February, with some only receiving Rs 100. This had caused consternation and resentment among them.

Counsel for some of the petitioners, Col. Indra Sen Singh (ret’d) said the Supreme Court was assessed on the urgency of the case today, as the court-imposed status quo on the matter has apparently been raped by the authorities. The earlier August 2019 standstill order has been filed in court for review.

The Central Commission for Direct Taxes (CBDT) published a circular in June last year in which it estimated that the disability pensions of soldiers released from the army pension were taxable, while those who were “invalidated” Prematurely from service were exempt. .

This circular was contested by disabled soldiers who argued that it contradicted military pension rules which treat all disabled soldiers as “disabled” for the purposes of disability pension. When the matter reached the CS, he ordered the “status quo” on the same.

The income tax service later said that no instructions had been given to banks to deduct the tax and that the circular was only issued as a clarification, not for disabled retirees. , but only in cases where a person retires and subsequently develops a disability.

Agents aware of the case say the circular was issued by the CBDT by processing the case through 10 agents of the departmental hierarchy in a single day on June 24, 2019, based on an old case initiated by the finance wing of the Ministry of Defense in 2015.

Defense ministry sources point out that even the ministry was taken by surprise by the circular and that, according to company rules, the Defense Ministry’s Finance Department had no jurisdiction over the subject. of the Department of Veterans Protection (DESW).